Material Costs for Construction Continue to Escalate
Lumber prices appear to be still adding additional cost to new construction. With the record low number of existing homes available for sale, contractors and builders would normally be ecstatic over the shortages. But due to the rising cost of materials and a slow but steady gain in mortgage rates, the cost for new construction appears only to be on the rise.
It is not the only reason why new construction is not on a rapid pace; workers’ wages are also on the rise. The shortage of materials as well as the shortage of skilled labor is creating a bottleneck for the construction industry across the country.
The lumber sawmill employment numbers gained 2.4% from a year ago, coming to 90,100 individuals. Also, residential construction was also on the rise hitting 118,500 for the same period in 2020.
But even with the increased number of employees, sawmill output in 2021 for September was 1.2% higher than in September 2020. The inability for the nation’s sawmills to increase production only produced significant price gains in August, leaving a very severe production gap. In addition, the current administration has also indicated that they are doubling the duty on soft lumber to 17.9%, which only fuels the fires of inflation for potential home buyers.
Lumber is not the only building material that is experiencing difficulty in this market. Other building materials are also experiencing shortfalls due to the supply chain issues exacerbated by administrative regulatory commissions.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.