Building material costs have risen, impacting the market in several ways.
How have rising building material costs affected the real estate market? By now, most have heard about the rising cost of lumber; lumber prices have increased by over 300% since the pandemic began, and other building costs have risen too. The slowdown in production due to the health crisis, the freezing weather in Texas earlier this year, and the resulting slowdown in the transportation of materials all led to price increases. The average cost of building a new home has grown by $25,000 to $35,000 since the emergence of COVID-19.
On the bright side, building material costs are starting to decline. We won’t see the effects for some time, but the costs are normalizing slowly. While prices have escalated, interest rates have stayed at historical lows, so homes are still incredibly affordable. With a 3% interest rate and that inflated price stretched out over 30 years, your monthly payments will be very manageable.
The challenges with new construction have also helped resale values. As new construction prices climbed, resale home prices climbed with them. So if you’ve been considering selling, I’ve never seen a better time to do so in my 26-year career.
If you’d like to know how your home fits into the market, visit our website to receive a full report on your home. That will give you a ballpark figure for what your home is worth, but if you’re serious about selling, give us a call. We’d be glad to have a conversation about your home and how to take advantage of the present market.