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The Honest Broker: New Construction and Skyrocketing Prices

The Honest Broker: Guard Gated vs Access Gated Communities

The Honest Broker: New Construction and Skyrocketing Prices

BY: Diane Lott, Broker Paradise Found Realty, Inc

 

Building a home during these past few months has proven to be very alarming to 

the builders, and consequently, the buyer’s bottom line. The biggest contributor 

to these increases correlates with supply issues and the inflationary rise of 

products. According to the Bureau of Labor Statistics Producer Price Index (PPI), 

which was recently released, the prices of goods used as inputs to residential 

construction including and excluding energy have risen 19.0% and 12.0%, 

respectively, year-to-date (YTD).

Although the recent decline in lumber prices is helping bring costs down (after a drastic rise earlier in the year), the decline has been offset by large increases in the prices of a multitude of other products. Of goods inputs to residential construction, including lawn care products, the prices of these 10 have increased the most thus far in 2021:

• Steel mill products

• Building paper and building board mill products

• Asphalt

• Plastic water pipe

• Fertilizer materials

• Laminated veneer lumber

• Thermoplastic resins and plastics materials

• Structural metal joists and concrete reinforcing bars

• Wood window and door frames

• Copper pipe and tube

Over the first seven months of 2021, the majority of these products’ prices have 

increased many times more than they did in 2020. The price change of steel mill 

products is the most glaring example, increasing 81.3% YTD following a 2020 

increase of 11.1%

As the supply chain experiences delays and inflation continues, it is projected that skyrocketing prices are expected to continue into fall of 2022 and continue to impact new home building for quite some time.

Be Well!!

Diane

Diane Lott, Broker

Owner: Paradise Found Realty

*The highest compliment you can give is when you feel you can refer a friend…
  Hope to see them soon!

Paradise Found Realty, Inc. of Palm City

website:  www.ParadiseFoundRealtyFl.com

Email:  diane@paradisefoundrealtyfl.com

Phone:  954-294-5060

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