Material costs today
So, you’ve got a fantastic construction project going. The idea was great, you found the perfect contractors, and planning is going superbly. That all is until you get to one step, budgeting out for materials. The cost of materials, especially lumber, is through the roof.
You’re now in the same boat as everyone who has attempted a construction project in the past few years. The Covid-19 pandemic has seen many shortages and price hikes, but building materials have remained volatile this entire time. The nature of the pandemic led us to this situation in a unique way, and there may be good news on the horizon for those of you still held back by material costs.
If you look at the material price trends you’ll notice they didn’t spike immediately when the pandemic hit, but only when the summer came around. Tons of people found themselves at home for the summer, some with extra savings for a planned vacation that was now on the backburner. Tons of people took this extra time and money and decided to renovate their homes. This initial spike in renovations had a massive impact on the lumber industry and was more widespread than you might think.
Many found themselves redoing parts of the home or even adding whole additions for home offices. Parents erected playhouses and jungle gyms for their newly home-bound kids. And sheds were put up across the country to facilitate lockdown-inspired home improvement efforts, plainly put lots of people were doing renovations in 2020.
This run took some time to recover from, but by the time materials were abundant again the homebuilding season began. The pandemic had also run down interest rates and there was a massive demand for new homes. The price of homes continued to rise but the demand stayed with it. We saw the highest rise in single-family housing since 2006.
All this new construction kept the prices high and supply low so long that we simply haven’t been able to fully bounce back. This level of volatility in building supplies hasn’t been seen since WWII and isn’t sustainable. Luckily lumber suppliers and other building supply manufacturers have been working hard to meet the demand.
Lumber processing facilities typically take about two years to build and begin production, a similar timeline is true for other material production facilities. So by the end of 2022, we expect a noticeable increase in materials production. Experts are predicting that materials prices may stabilize to pre-pandemic levels by mid-2023.
Combined with the fact that the boom in construction and renovations is tapering down there are even more opportunities for prices to normalize. Most of the people who had a big project for the pandemic have finished by now, and many of the large housing projects that popped up are well underway. If you’re fretting about material costs for your project, it’s a good time to practice some patience. Very soon you may be able to get your materials for a pre-pandemic cost.
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