To Build OR Not To Build?

Building prices are skyrocketing. So is now the time to build?

As we all know inflation is creeping up in everything we do, from food to building supplies. Supplies of steel (is up 150%+ according to a national supplier), cement is tough to get, and lumber pricing is by the far the highest!

When building a home the most used product for construction is, yes you guessed, it lumber. From doors, trim, cabinets, stick build frames, railings, exterior siding and trim, decking and so much more!

There are many factors that come into place here. The pandemic shut down lumber mills across the country, and supply chains were slowed by a shortage of truck drivers. Low interest rates and a lack of existing inventory increased demand for new construction, and all that new construction increased demand for lumber. It’s a perfect storm of demand outpacing supply.

According to Markets Insider, lumber prices are up by 400% year over year. The rise in lumber prices has added almost $36,000 to the price of an average new single-family home.

Building material supply shortages, coupled with increased prices for land, means buyers will continue to see high prices for new builds for at least the foreseeable future.

Last year, home price inflation reached 11.4%, but experts predict a slowdown to 8.1% through 2021. By 2023, price growth is expected to slow to 4%. To put it another way, the surge in home prices is expected to slow, but it’s going to take a few years as supply chains and workforces return to pre-pandemic levels of productivity.

So let’s go back to the question of building a home or purchase an existing home. If you have time to wait for the new construction home and the price is within your budget than that is the right direction to go into. However, if you have a bit more of a time crunch and need to move in by a particular date than a resale may be the right direction for you. Remember there are a lot of newer homes for sale at this very moment that are less than five years old. They have may have all of those updated must haves you are looking for!

Are you looking for a new home? This is what I am here for, to help. Contact me for your personalized new home consultation.

All my best,

Felicia