With the economy recovering, the housing industry, hit severely during the recession, is making a comeback in a BIG way! 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 significant price increases.
One of the main reasons is a lot more competition for skilled construction workers. A large chunk of the construction workforce was forced to leave the industry during the extensive recession when their work disappeared. A significant portion of those workers found other work and have not returned to construction. Plus, there has been 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. In fact, for every “1” person getting into the construction industry, there are “5” getting out for various reasons; retirement, etc. (Source) 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 substantial 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 is the rising material and transportation costs. For example, the cost of framing lumber is now at an ALL-TIME-HIGH; roofing, concrete, drywall, flooring is rising rapidly as well. Travel charges from subcontractors and suppliers 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. However, interest rates are now rising—NOW is the time to build!
Beat the Price Increase is going on all month long at Taylor Homes; lock in prices in January before they increase February 1st.
Taylor Homes always strives to deliver quality custom brick homes at affordable prices 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!
