For more than 30 years, we’ve helped our customers achieve their vision to build, remodel, or renovate their dream homes. Along this time, we’ve also seen how the costs of materials can impact both builders and buyers.
If you’re planning to buy a new home, take note of the rising price of lumber. If you’re under contract, you should pay attention, too. According to David Logan, director of tax and trade analysis at the National Association of Home Builders, framing lumber makes up roughly one-fifth of the total materials cost for building a home.
Back to building
When the pandemic began, lumber prices fell. With a united focus on containing the spread of COVID-19, construction projects slowed down, and lumber supply was high. Recently, however, building activity has received a boost.
For mills, it has been difficult to keep up with inventory levels. The result: a higher price for lumber. This is also an effort to make up for the tremendous losses earlier in the year.
Impact on new homes
- Higher lumber costs mean a higher price tag for a new home.
- Rising lumber prices may also lead to a smaller home for new buyers. When the lumber prices rose in 2018, there was less square footage in newly built homes.
Impact on homes under contract
- Builders will try to keep costs low, but eventually, the buyer will feel the rising costs.
- Some builders may negotiate with buyers to see how they can lower costs. This may include discussing alternatives to upgrades or other features.
At John Cloud Construction, it is our top priority to listen and deliver. As the demand for entry-level and mid-range priced homes increases, things have become challenging for builders. We’ve been paying attention, and we’re ready to help you make the best decision about your home. Contact us today.