Tight supplies and price increases in the market for lumber and other building materials are helping to limit the supply of new homes while pushing house prices up, reports the San Diego Union-Tribune ("Building Supplies Hammer Buyers," by Shobhana Chandra & John Gittelsohn/Bloomberg News).
"Suppliers of glass, drywall and wood products who reduced output during the slump are testing the vigor of the rebound by boosting prices before committing to restore capacity," the paper reports. "Builders, including Lennar, Toll Brothers and KB Home, are asking homebuyers for more money as a result or are delaying sales, posing a temporary hurdle for the industry that has become one of the pillars of the economic expansion." But housing market analyst John Burns told reporters the supply restriction is temporary. Suppliers "are raising prices dramatically, and once they're convinced that these prices are going to stick, they'll start reinvesting in those plants," said Burns.