Consumers wanting to build or buy a new home may soon find themselves in a dilemma.
A recent survey conducted by the National Association of Home Builders (NAHB). Shows that a shortage of cement and other key building materials looms as the biggest threat to the dynamic housing market that has produced record levels of new home construction in the U.S.
"The nationwide survey shows that builders are reporting shortages of cement, gypsum wallboard, oriented strand board (OSB), steel framing and insulating materials," said NAHB CEO Jerry Howard."
He notes that rising wholesale prices of building materials have added $5,000 to $7,000 to the cost of building an average new home, and construction delays caused by supply shortages could translate into further cost increases - money out of your pocket. Howard warns that left unchecked, this could produce "serious disruptions to the housing market."
The biggest concern is cement, with 41 percent of those surveyed citing a shortage of this vital building material. This is a huge jump from May, when 11 percent of those polled viewed this as a problem. In March, only 3 percent of builders reported that cement was in short supply.
Howard wants the Bush Administration to eliminate the high anti-dumping duties on imports of Mexican cement as a means of solving the problem.
The shortages first popped up this spring in Florida, which imports about 40 percent of its cement, compared with a nationwide average of just 20 percent. Supplies subsequently tightened in other regions partly because strong demand from China has diverted the amount of cement available from other countries and limited the number of cargo ships that can bring the product to U.S. ports.
Prohibitive duties have severely limited supplies from Mexico, which is the most logical source of supplementary imports. A delivery from that country takes only four days, compared to an average of 44 days for a cement shipment from Asia.
Howard points out that because global shipping capacity is strained, the ability to import cement from Asia and Europe to meet the shortfall has been significantly reduced. He says it makes sense to rescind the costly anti-dumping duties on Mexican cement that are preventing a stable and reliable supply of imports to U.S. consumers.
The housing market has been one of the bright spots in the U.S. economy. Figures from the Commerce Department show that in June, news homes sold at a seasonally adjusted annual rate of 1,326,000 units.
