No end in sight to home appliance shortages
Home builders are struggling to get equipment for their new home as demand for the products related to a COVID-19 pandemic increases.
The high demand for home appliances is due to a surge in remodeling projects that have suddenly become very popular as people are forced to spend more time at home. In addition, new homes are selling faster too, and now home builders are facing a shortage of products like washers and dryers, refrigerators, and other appliances.
A February survey by the National Association of Home Builders found that 90% of construction companies in the US are struggling to get appliances for the new homes they are building. Of these, 51% said they had struggled “on a large scale”, while 38% said they had struggled “on a small scale”.
Many builders reported that devices had been reordered for months. In the United States, many new homes are fitted with standard kitchen appliances, which has resulted in a shortage of refrigerators, microwaves, dishwashers and stoves, hobs and wall ovens, according to the NAHB.
Some builders could still sell their homes without all of these appliances, but the NAHB said that this isn’t always practical and depends very much on the type of house and appliance.
Realty Biz News first covered the device shortage in September, and at that time it was mostly consumers. However, the NAHB said some construction companies were struggling to source equipment as early as March, shortly after the pandemic hit the US
Experts say the problem is that many homeowners stocked up on groceries quickly and bought extra freezers and refrigerators to make this possible. In addition, many people observed hygiene and washed their clothes more often to kill germs. As devices became more common, many people tried to update them. Renovation projects have recently started, which further increases the demand for household appliances.
The pandemic has also affected device manufacturers’ supply chains. Most of these companies never anticipated the huge demand for their products, which resulted in shortages. Their manufacturing operations have been affected by the closure of large-scale component manufacturing factories in China and other countries. And although most of the factories have since reopened, manufacturers are still trying to catch up.
According to NAHB, the shortage of devices is widespread in all price ranges and brands. It is said that some builders have to wait months for their jobs to be completed, causing delays in getting their new homes to market. Unfortunately, it doesn’t look like the deficiency will be fixed anytime soon.
“Our backlog is still at the level it was at the end of the third quarter of last year,” said Jim Peters, CFO of Whirlpool, in an interview with Yahoo Finance Live. “We were able to ramp up production in order to stay at the current level of demand. We assume that we will be able to reduce the majority of the order backlog by the end of the second quarter. “
Peters said he believed the high demand for his company’s equipment was due to positive growth in the housing market, not just in new homes, but also in existing homes as many buyers forego all new products the first time they move in.
“Given the continued consumer focus on the home and nesting, we’re seeing more renovations where people are investing in their kitchens that they’ve spent more time in,” Peters said. “We continue to see that this trend is gaining momentum.”