The Cost of Building a Custom Home
If you’re considering building a custom home in the near future, you have to be aware of the rising costs of material. Lumber, metals, and other raw materials that are necessary for constructing a home have been rising in cost for the past year or so; a new trend in construction that has buyers curious about the cost of building their own custom home. You may be wondering which materials have increased in cost, why they’ve increased, and what that means for you and your custom home. That’s why our experts at Omega have outlined a few key considerations to help you understand the cost of building your dream house.
Lumber Prices Are Increasing
As of July 2020, the price of lumber has increased by 150%. The demand for lumber from the general population has significantly increased due to the escalation in home repairs and renovations. Due to Covid-19 and the restrictions that have been imposed, many people are spending significantly more time in their homes, giving them the opportunity and the drive to take on home renovation projects that they may have been putting off. An increase in demand for materials translates into an increase in the cost of said materials.
On top of an increase in demand, we’ve seen an influx of investors trading lumber as a commodity. Investors are buying lumber futures that ultimately control the price of the lumber purchased by consumers in stores, thus increasing the price of lumber across the board. Lumber prices have tripled since the beginning of 2020 and it is not projected that the cost will diminish in the near future.
The Factors Involved In Increasing Lumber Costs
We’ve already discussed how Covid-19 has increased the demand for lumber, but that’s not the only way Covid-19 and the culture of 2020 have affected the cost of materials. While many people were home and eager to start on projects and renovations, many lumber mills were shut down temporarily due to the restrictions and lockdowns of 2020 and 2021. With many lumber mills ceasing production temporarily, we see a new demand for lumber that can’t possibly be met, raising the costs and availability of building materials.
In efforts to encourage economic growth and activity, many banks lowered their interest rates, creating an increase in building and buying new homes, meaning that material demands have increased for both renovations and projects, as well as full home construction.
Throughout 2020 and 2021, we’ve also seen consistent issues pertaining to trades and importation. Border restrictions have delayed international trade and shipping, at times leaving lumber in warehouses or shipping containers for indefinite periods, unable to transfer them over the Canadian border. Demand has increased, while supply and importation have greatly decreased over the past year and a half.
Rising Costs Of Other Materials
While lumber is the most prominent example of rising material costs, other essential home-building material costs are also on the rise, further increasing the costs of construction beyond just lumber. Metals are also becoming more expensive to secure, meaning vital parts of the home like furnaces, garage doors, ducting, and wiring have become harder and more expensive to put into new builds and renovations.
When materials like metal are more difficult to acquire and importation is delayed or halted altogether, construction companies and builders see rises in costs from their suppliers, pressuring them to raise their own prices to keep up with the revenue.
What Does This Mean For Your Custom Home With Omega?
At Omega, we understand the importance of building cost-effective and high-quality homes. Although we’ve seen a significant rise in material costs without signs of a coming decline, we continue to prioritize our customers and their financial needs.
As we already have significant expertise and experience in purchasing and building with lumber, we are prepared to handle this spike in cost while still maintaining reasonable and appropriate prices for our customers. Our goal is to secure lumber at the beginning of the home building process to ensure that you’re locked in at the lowest price for material for your build as soon as a blueprint has been designed and approved.
What helps with the cost of materials is that banks are still offering very low interest rates in order to encourage economic growth, meaning that some of the cost for material is subsidized by the low interest, helping you get the best price possible.
Unfortunately, we know that the cost of materials is going to continue to rise for the foreseeable future, however, we also know that interest rates are going to continue to be low, meaning that as of summer 2021, this is the best time to lock into building a new custom home for yourself and your family.
Financing the construction of a custom home can be intimidating when the cost of materials is on the rise, however, at Omega Homes we work with you to build your dream home at a sustainable price.
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