Your Home Improvement Project may have just become a LOT more Expensive

The global semiconductor shortage has impacted most electronics, from dishwashers and refrigerators to washing machines. And panic buying of products like freezers during the pandemic has only made the problem worse. Last month, Consumer Reports announced freezers had sold out across the country, citing data from top retailers like Home Depot and Lowe’s. The product is not expected to be available until mid-summer, according to the publication.

Freezers are just one of many home appliances in short supply. National Housing Board (NHAB) Chief Economist Robert Dietz told Insider about 90% of appliance-delivery dates have been delayed and prices have skyrocketed in recent months. Prices for home appliances have been climbing every week, according to the Josh Wiener, founder of home-improvement firm Silver Lining Inc. He told Insider he’s seen delivery dates for refrigerators that have been pushed into October.

Steve Cunningham, the CEO of Cunningham Contracting and the chair of the NHAB’s Remodelers Council, said there’s been times when entire remodeling projects have been delayed weeks just for dishwasher deliveries. In March, Jason Ai, the president of Whirlpool in China, told Reuters that the company was facing difficulty sourcing the processors that power more than half of its product lineup, including washing machines, microwaves, and refrigerators.

The shortage has been going on for months and is only getting worse. Executives from Swedish appliance giant Electrolux said on a conference call in October that it had entered the quarter with “unusually low inventory levels,” despite higher production levels. “The increased time spent at home during the pandemic has resulted in more intensive use of appliances and higher share of household budgets allocated to home improvement,” executives said at the time. Wiener told Business Insider that his company has been working to order the items well ahead of time, but they have also seen shortages of the tools needed to hook the appliances up.

Anything that includes resin – vinyl windows, PVC boards, plumbing pipes, and electrical conduits – has become increasingly valuable since the Texas storms. The February deep freeze in the state shut down resin plants and has made windows and vinyl siding increasingly expensive. The storm also led to a hike in prices of plumbing fixtures, as the storm caused a spike in the repair of burst pipes, Dietz said. The Texas storm reduced the nation’s capacity to refine petroleum, which means a reduced ability to manufacture nearly all paints. It can be hard to predict which latex paint products will be out of stock and prices are continually fluctuating, Wiener told Business Insider. “A lot of it is hit or miss,” he said. “Most of the places we would normally buy from are sold out. Lately we have been forced to pivot and find new vendors.”

Lumber accounts for about 20% of a home, according to John Bitely, president of Sable Homes. He told Business Insider the record lumber prices have forced his company to raise their home-building prices. Lumber prices are adding about $36,000 to new single-family homes, according to Dietz. “As a company, there’s nothing we can do but pass those prices through to the customer,” Bitely said. Any item that is made out of wood is facing significant price hikes and shortages, Dietz told Insider. From cabinets to flooring, decking, and doors, the products’ prices are skyrocketing along with lumber prices, which Dietz expects won’t slow down until well into 2022.

Lawn and garden-care products have also had price hikes in recent months. Last week, Scotts Miracle-Gro announced during its quarterly earnings call it would increase prices by single-digit percentages, after record sales in 2020. “I don’t think we have a choice here,” the company’s CEO Jim Hagedorn said. “Every raw material we’re buying right now is at a materially higher cost than we had planned.”

It has been difficult for companies to adapt. “The biggest problem is the shortage is random so it’s very difficult to fix or nail down,” Bitely told Insider. “Because it’s impacting nearly every facet of the supply chain, it will be difficult to make it go away.” Dietz told Business Insider he doesn’t see a clear end in sight for the supply-chain issues. “The advice I give builders and remodelers is that at least for the duration of this year we are going to see an increase in the pricing for our materials,” Dietz said. “It’s an unsustainable trend and it’s imperative for policy makers to improve these supply chains.

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