The COVID-19 pandemic has affected just about every industry on the planet, including the custom home building industry in Grantsville, UT. Lumber, glass and other material shortages are delaying construction projects and driving up the prices of new construction. When you’re trying to find a new home for your family, this can make the buying process even more difficult.
Here’s how the materials shortage is affecting home construction.
Glass, lumber and more in short supply
There’s been a materials shortage since 2020, in large part due to the supply chain disruption. COVID-19 protocols made it a lot more difficult to manufacture and ship supplies across the world, which means everyone suffers. Right now, home builders are seeing shortages in lumber, glass, aluminum, cement, copper, pipes and other crucial home building materials. In fact, the prices are outpacing inflation. That drives new home construction prices up—after all, companies can’t afford to build and sell at a loss.
Unfortunately, there’s a labor shortage, too. There have been hundreds of thousands of confirmed COVID-19 deaths in the past 15 months, and on top of that, many of the millions of people infected suffer from “long COVID-19”—symptoms that take months, if not years from which to recover. That has drastically affected the labor market, making it difficult to find enough builders to match demand.
On top of the materials and labor shortages, there are some other factors at play. First, many home builders remain spooked from the 2009 housing collapse. Up until that point, lumber yards and home builders were doing business at a high level—but when the market crashed, they were left with an oversupply of materials and a shortage of interested buyers. Home sales dropped about 30 percent in 2009, and construction pros have been reticent to ramp up production ever since.
Now there’s a huge demand for housing, but not enough vacant houses to go around. That means buyers are competing—and depending on the area, drastically overpaying—for a limited number of homes. That’s especially true when buyers sell their old homes and move to a less expensive area. Since more people are able to work remotely now, the housing market is doing well across the country.
Ultimately, who is affected by these rising prices depends on what’s in your contract. If a builder didn’t account for the possibility of higher prices in the contract, they may be forced to bear that increased cost themselves.
That’s why many home builders are using escalation clauses—a contractual clause designed to put the responsibility of rising material costs on the buyer, rather than on the builder. Make sure you check your contract carefully so you know what to expect.
Experts have predicted that housing prices will continue to rise in 2021. If you’re ready to buy a new custom home, why not call a home builder in Grantsville, UT to learn more about your options? Reach out to UpDwell Homes LLC to get started.