It's Not Just Lumber...
It’s not just lumber… According to the National Association of Home Builders lumber prices are up 300% from April of 2020; but lumber prices aren't the only thing that has gone up. The prices of other materials such as steel and concrete continue to rise at record breaking rates.
With so little inventory in the current housing market builders are still pushing on to continue with new builds, however the rising costs have impacted their timelines, projections, budgets, and the appraisals of new construction. The National Association of Home Builders wrote from Material Costs Affecting Housing Affordability:
Immediate impacts of rising costs include:
- A downturn in new home starts, as builders struggle to begin projects with uncertain time frames and costs.
- Construction delays, as the supply of materials remains unpredictable.
- Appraisals not reflecting the true value of the home, because costs are rising too rapidly and builders are having to compensate on the frontend of construction by decreasing amenities available in the home. Without proper appraisals, the builder and/or the home buyer are left trying to bridge the gap between what the appraiser says the home is worth and the actual sales price of the home.
These are just several factors that are affecting the housing availability in a market where current builds are already in low inventory.