Home construction at David Weekley Homes' Timbergrove Village development pictured in this file photo from 2019, in Houston.

Three years ago, few consumers thought about the supply chain. Now, they find empty grocery shelves for coveted products such as baby formula, wait weeks for new refrigerators to reach their doorsteps and swallow the bitter pill of paying more for electronics as the computer chip shortage rolls on.

Other less customer-facing supply chain shortages are taking a more insidious but damaging toll on homebuyers’ wallets. Building materials shortages and a lack of developed land ready for new homes is adding costs and raising home prices. Homebuilders have scrambled since last year to find supplies of everything from lumber to tiling to meet the torrent of customer demand for new homes. Many builders said once they figured out a new source for supply of one item, then suddenly another item would become hard to find.

“It’s not a very scientific term, but we called it Whac-a-Mole,” said Todd Chachere, CEO of Houston-based Perry Homes, referring to the arcade game in which smacking down one mole only causes another mole to pop up -- a metaphor for the seemingly endless list of shortages popping up in the homebuilding industry.

Developers have barely kept pace with providing finished lots where builders could site new homes. They too have been contending with their own shortages on items such as like concrete, piping, rebar and everything needed to actually install the infrastructure supporting new communities.

In one out-of-state community, Houston-based David Weekley had to build entire houses while testing all the electrical components with a generator. Why? Because the local utility was struggling to find transformers to bring electricity to the sites, said Chris Weekley, president of David Weekley Homes. He added there are dozens of other examples of here of supply chain shortages snarling construction timelines.

The supply of finished developed lots in Houston is hovering about 10.5 months — near a record low and about half the inventory needed for a balanced market, according to housing data firm Zonda. About 33,000 future lots are under development in the Houston area, which will not be enough to help the market return to normal this year, said Lawrence Dean, senior vice president advisory for Zonda.

On HoustonChronicle.com: What’s making Houston’s affordability problem worse? Development delays

What does this mean for buyers who want to purchase a new home? More money. Construction delays caused by supply shortages only add to the costs and constrain the number of new homes coming on the market. Fewer new homes for sale makes tight housing inventories tighter, further lifting home prices. And if a house that used to take five months to build now takes 10, a prospective buyer will have to continue renting which can add even more costs.

There are some signs the supply of houses for sale could improve this year, but by how much is uncertain. Last month, homes for sale increased 9 percent gain , but even with a bump in new listings, demand still is outpacing supply - pushing up median prices of all homes by 16 percent year-over-year in May, according to Houston Association of Realtors.

On HoustonChronicle.com: Average Houston home prices zoom closer to $450K

Homebuilders are expected to start construction on 40,000 to 42,000 new houses this year in the Houston area — which could be down slightly from last year but still higher than the 30,000 new housing starts seen in 2018 and 2019, noted Dean of Zonda.

And as mortgage rates rise, a slice of new homebuyers may be forced sit on the sidelines, cooling demand for lower-priced homes. Dean said buyers at the upper-end of the spectrum are less deterred by rising mortgage rates. Rather than skipping purchases all together, they’re downsizing to make the numbers work for their budget, Dean said.

Weekley said lower demand could help ease the strain on supply chains, but so far the drop in demand has been somewhat modest.

“The example I would use is if we had, 10 people waiting in line for a home and ready to purchase, now we might have two or three,” Weekley said. “I think we will see it improve on the supply side, but I'm not prepared to say whether it’s going to get back to normal (in 2022).”

marissa.luck@chron.com, twitter.com/marissaluck7

Marissa Luck covers real estate for the Houston Chronicle.

Originally from Hawaii, Marissa previously covered refining and chemicals for the Chronicle and also had stints at Costar, the Austin Business Journal and The Daily News in Longview, Wash.

She grew up near Seattle and studied international political economy at The Evergreen State College in Olympia, Wash.

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