It’s true that building costs have gone up over the last year and are continuing to rise. If there’s one thing real estate and construction experts agree on, it’s that no one can predict if and when prices will return to pre-2020 levels.
If you’re a homeowner who’s been waiting for construction costs to fall before starting a remodeling project, take a moment to understand the current market and discover why it may pay off to get started on your project sooner rather than later.
Why are costs going up?
There are many factors that contribute to the price of building materials, all of which stem from two fundamental economic concepts: supply and demand.
When the pandemic hit last spring, it threw previously efficient national and global supply chains into chaos. Production in the mills and factories that supplied the construction industry with everything from lumber to light fixtures ground to a halt as staff stayed home. Similarly, the logistics companies that delivered products to wholesalers and retailers slowed or stopped their operations. The construction industry has been dealing with the fallout ever since. Add to this the current labor shortage and rising labor costs, and the supply of construction materials and labor has increased significantly compared to recent years.
While supply and labor decreased in availability, the demand for real estate and construction services skyrocketed. Consumers took advantage of very low borrowing costs and their federal stimulus checks to build a new home or remodel their current abode.
Much of the limited building materials supply is going into new home builds, as people upgrade to a newer and more functional space. Earlier this year, single-family homebuilding reached its highest level since 2006. At the same time, homeowners who have been cooped up in their homes for months are renovating their current homes. The increase in demand has shifted the available supply of construction materials.
What’s more, 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 the industry. A drawn-out delivery process will likely continue to alter project timelines and, ultimately, project bottom lines.
Will costs go down soon?
It’s difficult to say when, or if, the costs of construction materials and labor will go down. The global supply chain is still in recovery mode, as is the labor market. Meanwhile, home buyers and homeowners show no sign of easing up on their construction projects.
Our advice? Get started with design to prepare your project for clear pricing and estimating so you can begin with your home remodel when the time is right for you. Raw material suppliers and remodelers, including House Lift, are doing the best they can to provide accurate estimates to best serve customers and clients.
Why should you book your remodel TODAY?
The Twin Cities construction industry has needed to shift its timelines and price estimates significantly over the last year. The best thing you can do to ensure you don’t overpay for your home remodel is to have a design in place for accurate cost estimates and planning.
By getting your design, planning, and financing done first, you will likely lock in a favorable price range, as prices are likely to increase the longer you wait. It also puts you in the best position to begin construction at the earliest possible date.
Whether you are remodeling your kitchen, renovating your bathroom, or expanding your home with 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!