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The Washington State Housing Market in 2021

May 6, 2021

Unprecedented demand for new homes is impacting everything from materials to build times, but it won’t last forever.

New Tradition Homes is committed to building new homes in Washington with distinctive, innovative designs in desirable locations. We are passionate home builders, and with our dedicated team, easy process, and quality construction the outcome is simply a better home for you. 

We are committed to higher standards and integrity in every home we build. That's why we wanted to share exactly what's happening in the housing market today, what that means for building, and how we can overcome these challenges together.

Supply and Demand

Over the last 15 months, the housing industry has been dramatically impacted by pandemic-related events. While housing has been a bright spot in the nation’s economy, we are now facing unique challenges that are driving up the cost of materials and extending building timelines. 

There is an incredible demand for new homes right now, and not enough supply of materials to build them at a pace that satisfies the market. This has led to increased costs and extended build times. 

About 80% of the lumber used in U.S. home construction is imported from Canada. Many lumber mills, both in Canada and the U.S., were forced to shut down in 2020 due to health concerns. At the same time, an unprecedented combination of factors led to a surge in demand for new housing and home renovations, all of which require lumber and building materials.

Another critical building component to face severe shortage is resin. This plastic is used throughout the home construction process, including as a bond to strengthen wood and flooring materials, and in paints, coatings, primers, windows, and sealers. Much of the U.S. production of resin comes from Dallas, which was severely impacted by the 2020 winter storm. As a result, production slowed or stalled while demand continued to rise, resulting in price increases and building delays.

These are only two examples. Product delays and suspensions are affecting everything from concrete, cabinets, and appliances to paint, sheetrock, and lumber. Nearly every line item in a home’s budget is under some type of delay or substitution, and timelines for new homes are being pushed out longer than usual. 

The Impact on New Homes and Homebuyers

The biggest impact of the delays has been cost. The National Association of Home Builders (NAHB) has estimated that, based on a $350,000 home, the cost has increased by $24,000 based on lumber alone. That number shifts depending on the size of the home. 

Builders are substituting products and finishes in order to keep a new construction home on schedule. On-the-spot decisions are made when builders are notified that a product is no longer available. Builders are doing their best to inform buyers of changes as soon as possible, but due to the increasing unpredictability in supply chains, they may not be able to guarantee products by name or provide specific colors of product. In some cases, they may not be able to provide the product at all. 

Build timelines are longer. Builders are doing everything they can to stay on schedule for builds that have already started. However, product substitutions with little or no notice can cause significant changes to the building process for future homes and lead times can become unpredictable. 

Builders are making hard decisions and finding solutions. Rather than face the uncertainty of supply costs and product availability, some builders are pausing sales until they can provide buyers with a definite cost and/or build time. Many builders have turned to wait lists or lotteries to manage the surge in interest. 

Looking Forward

NAHB is taking steps to mitigate the lumber shortage by urging Congress to work with domestic mills to increase production and end tariffs on Canadian lumber shipments into the U.S. As demand for suburban housing cools a bit and material suppliers have an opportunity to catch up, the entire housing industry should stabilize. We’re confident that home building — along with its positive economic impacts like job creation and tax generation — will rebound soon.

With interest rates still near record lows, it continues to be a great time to buy or build a new home. We recommend taking these three steps so that you are ready to act when you find the one:

• Understand price increases so that you are educated on why your new home costs what it does, and you are comfortable with making a deposit. 
• Before you start looking, get pre-approved for a mortgage so that you can act fast when the home you want becomes available.
• Join interest lists so that you are the first to be notified when communities release more homesites for sale or when new communities are ready to launch. 

At New Tradition Homes, our team takes great care daily to minimize the aforementioned obstacles the home building industry is facing. We will continue to ensure our homeowners receive the quality home and first-rate customer service New Tradition Homes is known for. 

For more information about our upcoming homes and communities, please contact our Online Sales Counselors, Shelley and Nick, at (360) 787-9352.