Construction Cost Relief May Be Coming From Materials With These Key Characteristics

Builders have been burdened by price hikes and backlogs for essential materials throughout the past two years, but construction cost relief may be coming ahead of a potential recession in the year ahead. An economic downturn, though detrimental to housing demand, could lead to discounted prices for framing products and discretionary materials like flooring and kitchen cabinets, which are more sensitive to the economic cycle, John Burns Real Estate Consulting reports. 

Materials like decking, windows, and cabinets will also become less expensive in a recession, but products like siding and HVAC are likely to be unaffected. Distribution costs will also stabilize as truck driver labor and gas prices continue to ease in a less inflated economy.

The biggest construction cost relief should come from materials that have any of these five characteristics:

1. Used heavily in new construction, such as framing, since new home construction dollars are twice as volatile than remodeling and more sensitive to the economic cycle.
2. Discretionary, like kitchen upgrades, as those categories are more easily deferred until better days and have a higher chance of being discounted. Less discretionary products like siding, roofing, and HVAC still need to be replaced.

To read about more products that will be affected by a recession …

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