With demand soaring and materials in short supply, the cost of building a home has risen sharply in the last year.

With prices for construction materials soaring during the pandemic, write Marcy Nicholson, Dave Merrill, and Cedric Sam for Bloomberg, building a home is more expensive than ever. "There are any number of factors at play—from rock-bottom mortgage rates to city dwellers’ rush to the suburbs to shortages of materials—but the simplest explanation is that there is just too much demand for builders and their suppliers to handle. All of this makes housing an extreme manifestation of the inflationary pressures percolating through the booming U.S. economy."
Costs for some materials, like concrete, were already rising sharply before the pandemic hit. Lumber, "the biggest pain point by far," has jumped in price by as much as 400%. "It’s not just the two-by-fours that go into the framing. Builders are paying up and waiting longer for oriented strand board (OSB), a lower-cost stand-in for plywood. The price of these panels soared to a rare premium over plywood in October, and they’ve since been in short supply." As builders struggle to make up the increases, "buyers are on the hook for the higher costs," and "[w]ith raw materials prices continuing to surge around the world, the pressure on builders to increase costs is likely to grow stronger."
"This could be industry killing," worries Steve Martinez, the owner of a construction business in Boise, Idaho. The final cost of one of his home models, the Baybrook, has risen 61% from 2019.
FULL STORY: Building a Home in the U.S. Has Never Been More Expensive

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