Here’s one of the most common questions we’ve been getting recently: why is my home more expensive to build now than it would have been in past years?
There are a lot of factors that go into the costs of construction. The last year and a half especially has seen a lot of turbulence in the prices of both materials and labor, thanks in large part to the COVID-19 pandemic.
The pandemic resulted in more people spending a lot of time at home, thanks to the rise of remote work. This, in turn, encouraged homeowners to take on some remodeling projects they had been putting off, while also changing some of what homebuyers were looking for in their searches.
Unfortunately, there was a significant material shortage throughout much of 2020 and 2021 to accommodate the rising demand for remodeling, which in turn caused prices of lumber and other materials to soar. But even as those material prices come back down, there is still a major labor shortage that is affecting costs of construction.
Why is the cost of custom construction rising?
The labor shortage is a complicated issue, and there are a variety of factors that could be involved.
One major factor industry experts point to is how construction jobs are perceived. There is a perception that jobs like construction or other trades are “low class” or not good enough, which is why many parents encourage their children to pursue white collar jobs. With more people being pushed toward four-year degrees, there are fewer people getting into fields like construction, all due to negative perceptions of the industry and its perceived money-making opportunities.
Another factor is the cyclical nature of construction work. When the housing market is down, so is the construction industry. People get scared off by this inconsistency and look for jobs that do not have such cycles of busy and slow times.
With the construction industry bleeding labor, this means prices are only going to continue to rise, because there are more jobs than these workers can handle. With less labor available, the time of completion for construction and remodeling jobs goes up.
The bad news: this trend doesn’t look to be reversing anytime soon. And in fact, it’s a trend that long predates the pandemic. The pandemic has merely underscored what has been a subtle problem for years now.
Addressing the labor shortage
There’s not a whole lot that can be done currently to address the labor shortage. But in the long run, the best thing people can do is improve perceptions of the trades.
There are a lot of misconceptions about trade work. Some believe it’s dirty or crude work, others believe you have to perform hard manual labor late into life.
There is also a lack of diversity in the construction industry, in which the vast majority of employees are men, and most of the supervisors are white. Finding a way to encourage people of all backgrounds to get into the industry will help improve the labor pool for the long term.
For more information about the state of the construction industry and why the cost of custom construction is on the rise, contact the team at UpDwell Homes LLC.