Shortages of construction materials fuel growth in modular homebuilding
Modular and prefabricated construction has gained popularity in recent years and construction materials shortages are further poised to elevate the sector.
Startups in the construction space have raised nearly $1.5 billion so far this year, more than the nearly $1.2 billion the sector raised in all of 2020. Companies focused on building materials specifically have raised more than $430 million this year. The main reason for these new ways of building is clear: There’s a very real housing shortage in the United States, and it’s only gotten worse since the COVID-19 pandemic hit, disrupting supply chains and impacting the construction industry as some projects were paused. To add to the problem, many homes in the U.S. were built 70-some years ago, and are due to be rebuilt for one reason or another. Additionally, there’s a shortage of skilled labor, with only so many people who are able to build homes the way they’ve traditionally been built.
That’s prompted a lot of new startups in the homebuilding space to spring up, including some that use alternative materials to build homes and others that use tech to streamline the building process. While they’ve been more in the spotlight recently as the construction industry has faced a materials shortage and the lumber shortage has received the most attention, there’s also been shortages in other areas such as copper and windows.
The price of construction commodities including lumber and gypsum are the latest pressure point on the industry, which has been trying to find new ways to increase productivity, decrease cost and increase sustainability. Lumber prices spiked at the beginning of the pandemic. Although those prices finally dipped somewhat last week, they’re still up 300 percent year over year, and a record number of builders reported material shortages last month.
Prefabricated home building involves manufacturing the parts of the structure offsite, while modular construction is a form of prefab construction involving the assembly of whole sections offsite and assembling them onsite. A person’s home is the largest, most expensive and most-used consumer product. There’s always been a bit of curiosity in alternative materials in the construction industry, but there’s been a renewed interest as people look at how technology can make the construction industry more efficient.
Source: Crunchbase News