If you are in the market for a new home, you may want to close the deal sooner rather than later. Construction costs are soaring and appear only to be going higher. Lumber prices hit $1000 per thousand board feet, an all-time high in recent weeks, and has risen more than 300% since the pandemic low last spring. Paul Jannke, Forest Economic Advisors LLC.'s principal of lumber said, “Production is going to have a hard time keeping up with demand growth as the world economy bounces back from Covid-19 in 2021-22.” So how much are these rising costs adding to a new home’s construction cost? The National Association of Home Builders estimates rising lumber prices have added a stunning $24,400 to the cost of a home over the past ten months. Now don’t forget to add in the rising price of copper, which has gone up 87% in the trailing year…well, you get the picture. (Chart from zerohedge.com)
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Jeffrey Cerny