Harming housing affordability, the cost of softwood lumber, steel, aluminum and other imported materials and equipment are rising, exacerbating proce volatility and driving up housing costs.
Uncertainties within the production process and when supplies will be available to complete homes in a timely manner are making this rise in costs worse. Whether or not the homes will appraise at the correct price to reflect these rising costs is another key concern.
According to the National Association of Home Builders (NAHB), Supply and Demand: As demand for building materials increases, particularly during the busy seasons for housing construction, and as supply remains limited due to various factors like global shortages and disruptions, prices naturally rise. This is a classic economic principle known as supply and demand.
Inflation:Â Inflationary pressures are also contributing to higher material costs. When the general cost of goods and services rises across the economy, it inevitably impacts the price of construction materials as well.
Global Factors:Â Many raw materials used in construction are globally traded. Factors like geopolitical tensions, trade disputes, and changes in international trade policies can disrupt supply chains and lead to price increases.
Sustainability Initiatives:Â There’s a growing demand for eco-friendly and sustainable materials in the construction industry. While this is a positive trend for the environment, it can put pressure on costs as these specialty materials often come with a higher price tag.
