If you know anyone building a house, you’ve probably heard them complain about one thing; the cost of lumber.
Prices have skyrocketed in the past year, and on average it’s added almost $36,000 to the cost of a new single-family home.
Supply is literally down 20% from last year at this time.
Here’s the primary reason; more people are building now than ever. In fact, 25% of all homes for sale now are new builds. That’s the highest percentage ever, as usually it’s more like 10%.
The competition for new and existing homes is incredibly intense, all over the United States.
Lumber prices are up 67% just since the start of 2021, and they are up an unfathomable 340% from last year at this time.
Remember, it’s not just wood that goes into the framing of a new house, there’s also wood flooring, window frames, cabinets and doors.
Anther factor is lumber manufacturing essentially shut down when the pandemic hit, which led many people to assume the housing market would take a long-lasting dip.
Oh, and if the exorbitant price of lumber isn’t bad enough, land prices are rising quickly too. The price per single lot has raised 11% since last March, while the lot supply is down 20% the past year.
Where are the tightest markets for avayalbe land right now? San Francisco, San Diego and Baltimore lead the way.
If you’re in the market for a new house, we don’t need to tell you how wild it is right now. You’re probably living it.