With the economy recovering, the housing industry, hit severely during the recession, is beginning to make a comeback. And with the housing market recovering, new home construction demand is increasing and so are costs.
It is true that costs in every industry tend to increase slightly from year to year; however, there are several factors affecting the construction industry, causing a steady average price increase.
One of the main reasons is more competition for skilled construction workers. A large chunk of the construction workforce was forced to leave the industry during the 2008 recession when their work disappeared. A significant portion of those workers found other work and have not returned to construction. Plus, less focus on the trades in technical schools and fewer young people interested in pursuing construction careers is also contributing to a smaller pool of workers. Construction companies are feeling the immediate impact of the worker shortage, as it contributes to higher costs and longer project schedules.
The result? Fewer vendors and subcontractors (labor shortage) resulting in rising costs for the builder and the homebuyer. The age old principal of supply and demand is at work.
Another reason new home construction costs are rising, but with just as much an impact, is the rising material and transportation costs. For example, the cost of framing lumber has increased nearly 30% from 2016 and roofing, wall panels and flooring 17% and rising. Travel charges from subcontractors to job sites is now common practice, adding to the cost of building a home.
And a factor not thought about right away is the current low mortgage rates. These lower rates have sparked more interest among potential home buyers, who want to take advantage of this. This rush to build now while rates are low is increasing demand, straining new home construction’s already reduced labor force.
Taylor Homes always strives to deliver a quality, affordable, custom brick home that can be tailored to suit your needs, your budget and your lifestyle. Please visit www.taylorhomes.com or call 1-800-96-TAYLOR today!