Costs of Construction Materials Rise at Record Pace
Discover how much more it now costs for home building and renovations.
Estimating costs to build or renovate a home or flip a house is no easy task these days. Numerous reports have detailed record high lumber prices, and a subsequent decline, but that’s only part of the story. The prices of many materials and services have risen dramatically.
Overall material costs
The prices of building materials has risen at record pace of 19.4% overall over the past 12 months, according to the Bureau of Labor Statistics Producer Price index. Here’s a look at the prices of key building material categories that affect home building and renovation.
Few things can change a room like paint at such a relatively low cost. However, it’s not as low-cost as it was a year ago. Manufacturers have been passing a rise in the price of raw materials on to customers. On August 1, Sherwin Williams implemented a 7% price hike on all paint products. If you just have one room to paint you might not feel the crunch too much, but if you have to paint multiple rooms, your home’s exterior or an outbuilding, the hike could be significant.
Steel, concrete and copper
“Hyper-volatility” is D Magazine’s description for the steel, concrete and coppemarkets. Some steel construction materials, like plates, are up 140%. Steel rebar used in concrete has driven concrete prices up, and some suppliers will only guarantee prices for 15 days. Copper is up roughly 43% from 2020—that’s a significant increase for any home wiring project.
BUILDER reports that gypsum products, which includes wallboard, was up 15.8% year-to-date in July. Over the last 12 months, the gypsum products index climbed 21.7%.
Wages for labor
Wages for construction-industry workers have been steadily growing 3.8% each year, according to Forbes. For residential construction workers, paychecks are even healthier, growing 5% annually.
It’s more than just the pandemic
The pandemic has a been a key factor in the rising cost of building materials. Many folks ordered to stay at home spiked demand as they embraced home improvement and building projects to make their homes more comfortable.
At the same time, manufacturers that supply raw materials and building components experienced shutdowns, limiting supply. However, the pandemic is not the sole driver of higher prices. Climate has played a role, too. The Texas freeze in February shut down many manufacturing plants for weeks. Fires and floods have disrupted transportation. And backlogs at shipping ports have kept raw materials and components from making it to their destination.
Despite the increase in the costs of building materials, home building continues. As of July, housing starts rose 6.3% to a seasonally adjusted rate of 1.643 million units, the U.S. Commerce Department reports.
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