Construction prices have been all over the place, and right when we thought they would stabilize they seem to be increasing again. One of the materials that have struck fear and uncertainty in buyers and builders alike has been lumber. Lumber has seen the largest spike in pricing and has been one of the most expensive raw goods in the most recent years.
As we all know when prices increase for the builders of America, prices increase for the future homeowners here in our country. According to the U.S. Census Bureau residential construction spending rose 1.0% in March to an $882.0 billion annual rate, an 18.4% gain over a year ago. For single-family home construction, spending is up 19.4% the past year.
Part of that spending increase is due to the cost of building supplies. The National Association of Home Builders says that lumber prices increased pricing for the typical single-family home by almost $20,000 in a recent four-month period! This is just lumber and doesn’t include concrete, labor, electrical, or plumbing which have all seen increases in price.
What does this mean for the average person? It looks like costs aren’t going to be coming down anytime soon, and property values and costs are going to continue to rise. It will be interesting to see where this leads us, as mortgage rates are increasing and causing people to give up their home search and go back to renting.
Despite the rising costs, here at Center City in downtown San Antonio and around the surrounding area, we are doing our best to mitigate price increases and provide the best value possible for all homeowners. It isn’t easy but our longstanding relationships and value engineering, which comes from 25+ years of construction experience, really help us to rise above the competition.
If you are looking to build, buy, invest, develop or sell something in Downtown San Antonio or anywhere around the city give us a call! We would love to serve you and see what we can accomplish together!
– Michael Guzik
