The Impact of Rising Costs of Building Materials

I have seen some crazy things happening lately in the homebuilding industry! There is turmoil with both new and existing homes as a result of shortages and supply-chain disruptions in many different areas. 

In this episode, we will look at the problems we are facing and discuss why they are happening. We will break everything down into the three parts of a house: the land, the materials, and the labor. They are all connected, and we are having challenges with all of them. 

Welcome to another episode of the Everyday Green Home Podcast! I’m Marla, the Green Home Coach, and I am happy to have my ever-popular co-host, Tony Pratte, joining me face-to-face in the studio today!

Huge impacts

The markets for real estate, new builds, and remodeling of existing homes are connected, and they are all having problems now. The impacts of that are huge. They are affecting building costs, timing, and even how people are moving around.

The rising cost of lumber

Houses are now being sold, sight unseen, to the highest bidder, and new homes are currently averaging between twenty and forty thousand dollars more due to the rising price of lumber. 

A challenge

There are not enough people working in the construction and skilled trades. Even finding someone to come in and do a simple home repair has become challenging right now. 

Sawmills

Sawmills got shut down during the pandemic. We have fewer sawmills online now than we did ten or twenty years ago because many of them shut down during the great recession and never got going again. 

Border and lumber issues

The turnaround time for lumber shipments from Canada is way too long because it has to cross the border and quarantine. The transportation of the materials is also an issue because the transport drivers are having problems with being locked up.  

Alternative materials

The producers and salespeople of alternative materials are finally making sure that their voices get heard. 

Cabinets

There is a massive issue with kitchen cabinets being unavailable. 

Windows and doors

Even windows and doors have become hard to find because factories in which they are made were shut down. Now, they are unable to catch up with the demand.

Appliances

There is a six-month wait for many appliances, even though many warehouses are full of appliances that have already been paid for. The warehouses are full because the pipeline got stuck due to new houses not being completed or reaching a point where the appliances can get delivered.

Copper

Electricians are running out of wire, and the price of raw copper is shooting through the roof! That affects plumbers and electricians and also inadvertently HVAC heating and cooling.

Resin

There is a shortage of the resin that makes the plastic for electric cover-plates, light switches, wall plates for cable or data connections, speakers, ceiling-mounted speaker brackets, and more.

It is all connected

If the openings in the dry walls for the electric wires do not get covered, the house cannot get inspected. Without the inspection, the sale of the house cannot close. That creates even more demand in the already-tight existing home market. 

Home inspections

Homebuyers and sellers are now becoming willing to waive their home inspections. If you buy a house without a home inspection, you have no recourse, and you will never know what you are dealing with in terms of termites, water issues, or components that do not work.

Demand is outstretching supply

Currently, the demand for materials is outstretching the supply. That has caused a surge in pricing. 

A shortage of land

Many people want to move into single-family homes. That requires land, but there is a shortage close to the cities.

New areas

As a result of more people working more flexibly or working from home, new areas are starting to open up for people to live. 

The basics of land

The land to build homes on is finite and scarce. Ten years ago, it took about six months to get through all the permit requirements for developing a new piece of land. Now it takes two to three years, and that leads to increased costs.

Labor

There has been a shortage of labor in the skilled trades and homebuilding industry for many years. Because, as a nation, we were encouraged to aspire to higher education. As a result, we lost almost two generations of tradespeople. Many people do not realize that the trades are higher education. 

No debt

With most skilled trades you could make between sixty and a hundred thousand dollars a year, with zero debt.

Women in the construction industry

More and more women have been joining the construction world. We need women to be doing that kind of work, so I am excited to be joining a project in Utah next week, called The House that She Built. It is hosted by women in various trades, to bring awareness to women in the building industry.

Professional Women in Building

My part in the Professional Women in Building organization was to help bring an event, Build My Future, to Oklahoma City in 2019.  

Construction sites

Construction sites are fun! There is music going, people making fun of each other, and people working hard as a team. Individuals from the various trades can be found on-site, all with the same end in mind- to produce the home. 

What we can do about the labor shortage

We can encourage young people to learn more about opportunities in the trades and hopefully connect more with those coming into the trades- particularly with more women. 

Jobs in construction

There are jobs in construction for everybody! So, if you want a job, you will find one there because the unions are actively looking for people.

 

Referral Links:

My website Green Home Coach

Book: Living Green Effortlessly

Learn how to make your home healthier for you and our world in my Love Your Everyday Green Home 

Why Builders Stick with Lumber Despite High Prices, NAHB Now

Steel Prices Have Tripled

Supply Issues Linger from NAHB Now

NAHB Supply Chain Summit

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