Hello Readers in print and online,
Happy New Year to you and your team.
What kind of year will 2022 hold in store for the U.S. home building business? Our housing economists writing in this month’s issue all seem to agree, more of the same is what we can expect. The anticipated rise in interest rates, several rises, in fact, is the elephant in the home building room which could potentially derail future growth in housing.
The other big caveat is the ongoing whipsawing of materials costs fluctuating, combined with still scarcity of some materials, adding costs and more time to production cycles. Lumber prices spiked again in the Fall, although the larger big production home builders bought when market prices fell and have hedged for the foreseeable future. Smaller operations are at the mercy of the market, which is cause for concern.
Government imposing additional tariffs on Canadian lumber at this time is ill advised and unhelpful, given the supply chain issues, still unresolved. Naturally the plague still has a role to play too. New variants of Covid cause panic in the markets and illness among the populace, impacting business, schools and our lives in general. While more of us are vaccinated and boosted, hold outs are at increased risk and are driving infections and taxing scarce resources.
A year with less government fiscal support for businesses and individuals seems likely, as our economy stabilizes and some new version of normal emerges. The stimulus bills and legislation that have passed into law will have some bearing on the year, although some planned additional spending bills are politically gridlocked and may not see the light of day.
Inflation remains very high and showing no signs of easing. Fuel and food costs have risen considerably and are out of step with supply chain considerations. This is also cause for concern.
On the Geo political front Russia and China continue to pose a threat, militarily, politically and fiscally. We seem to be wrong footed and on the defensive constantly in response to ongoing threats. This seems to be an area where a coordinated government could do more to protect and preserve our interests globally.
Homebuyers will respond to stability in general. Here’s hoping for more of that this year. There will be 11 more issues of the magazine in 2022, our 32nd year in publication. You can read B&D online at www.bdmag.com. You can also subscribe to the complimentary www.builderbytes.com thrice weekly e-newsletter.
Our team is always on the lookout for interesting developments and projects to showcase. Please reach out if you are working on something you think we should cover in the magazine.
Have a great year!