Construction Costs See Largest Spike in 50 Years
Companies claim the spike is due to supply chain issues, inflation, labor shortages.
According to NBC 5, the costs of construction are the highest seen in 50 years with contractors and home builders feeling the effects. It’s something to keep in mind if you are building a home – or really anything – this year.
Recent data from the U.S. Census Bureau shows construction costs went up by 17.5% year-over-year from 2020 to 2021, the largest spike in this data from year to year since 1970.
2021’s costs were also more than 23% higher than pre-pandemic 2019. Companies are blaming this on supply chain issues, inflation, labor shortages and other issues that have dominated headlines in the past year.
The price of softwood lumber alone has jumped about 85% in just the past three months after the U.S. doubled tariffs on Canadian lumber and wildfires disrupted lumber production.
Other materials like gypsum and steel are also higher.
These costs are ultimately passed down to potential homeowners building a home or other entities building or expanding any type of structure. Continued demand for homes and an influx of new residents to certain states, like Texas, have made way for sharp price increases as well.
According to a new report from Realtor.com, the median home price in DFW is now $400,000, up 14% from this time last year.
Homebuilder confidence is also dropping for the first time in four months, according to the National Association of Home Builders, despite strong sentiment scores at the end of 2021.