Why Building Costs Are Rising in 2021
As the Twin Cities get back to some sort of normal post-pandemic, there is one aspect of everyday life that might not be the “normal” as we understood it to be for quite some time. That change is the cost of materials used to build new homes and renovate older houses.
Why are costs going up?
There are many contributing factors to the price of building materials, but a few that are specifically important to the recent rise in costs. The price is being affected by current U.S. tariffs, very low borrowing costs combined with stimulus checks, and supply chains being slowed down.
The biggest influence to city home remodeling costs are the current tariffs the United States government has implemented on the import and export of these items. The tariffs in place are from the previous administration and the new administration does not seem in a hurry to change them.
Another significant factor is the record low interest rates being offered to homebuyers. This change has increased homebuying and new home building.
People are also looking to remodel or renovate their current homes after spending much of their time at home during quarantine, whether making room for a home office or tackling long put off projects. This increase in demand has shifted the available supply of construction materials.
Lastly, due to the COVID-19 pandemic, the streamlined supply chains of the recent past were completely disrupted. Most saw mills and other such factories were forced to shut down for at least a few weeks. Unfortunately, suppliers still have not been able to catch up.
Will costs go down soon?
The reality is that these costs do not look to subside in the near future. The pandemic is still affecting much of the world and the USA still has not completely gotten past it. Until this coronavirus has been more significantly dealt with, we will likely see increased material prices.
As mentioned above, the current administration has been predominantly supportive of the tariffs put into place by the previous one. Without any relief from that obstacle, the sky-rocketing building prices will likely continue until many other areas sort themselves out.
The imbalance of supply and demand on these materials that has built up over the last few months has also lengthened delivery times for much of this industry. A drawn out delivery process will likely continue to alter project timelines and, ultimately, project bottom lines.
Combining the tariffs with supply and demand issues has also formed an ever increasing shipping and freight backlog. With a reserve of this nature, easing of tariffs or an update to supply chains will not necessarily fix the backlog issue. In fact, it could make it worse.
Why should you book your remodel TODAY?
The industry of building, remodeling, and renovating has needed to shift their timelines significantly over the last year. This includes Twin City home price quotes on jobs that will only last a short amount of time because of the fluctuation in material costs across the board.
The best thing you can do to ensure that you do not overpay for the work you are looking to have done is to book your time today. Doing so will likely lock in a price range that will only increase the longer you wait. It also puts you at the front of the queue once materials become available.
Regardless of whether you are looking for kitchen remodeling, to renovate your bathroom, or add an addition, House Lift is here to help you. Our goal is to partner with you to create the home you have been wanting. We highly recommend you contact us today to get your project started!