Does it seem that costs are on the rise of lately? That answer would be YES. While we are still wading through the Lack in Skill Labor nationwide. Then we have Skyrocketing Lumber materials rising as much as 30% this year. This is due Tariff’s & politics on all Canadian lumber into the U.S. which is our main source of readily accessible lumber. Then we are seeing a rise in Interest Rates as well. Which these have been small & incremental at the moment and want them to stay that way.
But think about it 30% price increase in a few months on Softwood Lumber is HUGE. IF your Framing Materials, Cabinets, Millwork, Sheetrock etc costs say $60k multiple that by 30% = that’s adding an extra $18k to your home in material increase only. That is a cost that builders & developers can not absorb for long. While markets go up and down – there has not been any hope, nor answers on what we can expect in the next 6-months…
This doesn’t even take into consideration cities increasing in population due to economic job growth over other towns or cities. Increase in regulations & longer turn over times – as well as still an inadequate access to affordable and/or ready to build lots; subdivisions or infill lots.
Below are links pain relief (Copy & Paste) to three articles speaking about the state of homeownership, building, affordability and others…
While you can read about it almost anywhere – here is another article just put out (by the NAHB): http= //nahbnow.com/2017/03/skyrocketing-lumber-prices-put-builders-in-a-bind/
As well as a secondary article about Lack of Qualified Labor for Homebuilders (by MSN/CNBC): http://www.msn.com/en-us/money/companies/homebuilders-struggle-to-fill-jobs-americans-dont-want/ar-BBz1bRz?li=AA4Zjn&ocid=spartanntp
Housing gets less affordable in over 25% of Markets (by builderonline): http://www.builderonline.com/money/affordability/houses-get-less-affordable-in-25-of-markets_o
These reasons listed are why I always said there is no time like the present to build, buy, go on that trip or others… this is true for homebuilding today. Think of it like the price at the pump. It raised up substantially a few years ago, then dropped – but never back down to where it was or close to it. We got mad & then use to it – then happy that it wasn’t $3.00 no more; yet it increased substantially and hasn’t moved since. I personally project this will be the same with lumber, labor, or other prices. When has anyone ever went back down in a price once that increase was accepted or absorbed? This is the reason I tell prospective clients that if they can do it now – then do it. You know all the factors & costs today, but you may not know nor like them later.