National Association of Builders: only the rise in wood prices led to an average increase of $24000 in new house prices!
Release date: 2021-04-01 07:31 Source: unknown Author: admin Click:
According to the National Association of Home Builders (NAHB), the rise in timber prices alone has increased the average construction cost of detached houses by $24000 and that of apartments by $9000
Timber prices began to rise last summer
The prices of raw materials for housing construction in the United States are rising rapidly. Timber, one of the biggest costs of housing construction after land and labor, has never been as expensive as it is now, with typical timber prices doubling over the same period last year. Since October, the price of crude oil, a raw material for paints, drains, roof tiles and composite flooring, has soared by more than 80%. Copper, the raw material for pipes and wires throughout the house, costs about a third more than in autumn.
According to the Bureau of Labor Statistics producer price index, the price of granite, thermal insulation, concrete brick and ordinary brick has reached a new high in 2021, which measures the price change of producers for output. Gypsum board and ceramic tile at present no statistical record, but the price has also risen.
Building materials manufacturers such as paint maker Sherwin Williams, flooring manufacturer Mohawk and builder Dr Horton are increasing prices to pass on higher costs. They should be thankful for record low borrowing costs, federal stimulus spending and the pursuit of yields, which have spurred investors into the rental market.
American homes 4 rent, a long-term villa operator, built more than 1600 rental homes last year and plans to build another 2000 this year. The company said its timber costs per house ranged from $20000 to $25000, much higher than the previous $10000.
"Fortunately," said Jack Corrigan, the company's chief investment officer, We have been in an environment of rising rents That keeps our earnings neutral. "
Investors are looking at every corner of the economy for signs of rising inflation as a result of economic stimulus. They see this sign in the housing market, where rising input costs are translating into higher prices for consumer goods.
Policymakers at the Federal Reserve say the rise in prices of goods and services is not enough to change its process of keeping the Fed's benchmark interest rate near zero and injecting cash into the economy, which is still in recession and plagued by unemployment.
The lowest mortgage rates make housing more affordable, and the Fed's purchase of mortgage-backed securities has stimulated lending. During the period of home isolation and federal stimulus, the reduction in household spending helped people save down payments. Home buyers are competing with many investors who are buying, building and renting more.
Competition for homes has boosted prices in almost every region of the country, allowing those who already own homes to use their homes as ATMs. Last year, Americans took $152.7 billion out of refinancing their homes and continued to renovate their homes.
The National Association of Home Builders (NAHB) said, The increase in timber prices has increased the average construction cost of detached houses by $24000 and the average construction cost of apartments by $9000.
Executives at Dr Horton, the largest U.S. home builder, said they were paying extra for timber, roof tiles and facing shortages of windows and appliances. "In general, we're raising prices, but we need to strike a balance between price and affordability and what we think buyers can actually afford," said Bill wheat, its financial director