As supply chain disruptions, elevated prices for materials, and fast-rising interest rates create a wide range obstacles for builders post-pandemic, the cost of new home construction is inching toward a new high in most housing markets, the Business Journal reports. A 2,000-square-foot home in California’s relatively inexpensive Fresno County costs upwards of $450,000, largely inflated by high prices for materials like lumber.
As the pandemic-driven supply chain storm starts to dissipate, lumber prices are steadily declining, and most hold-ups are for loose odds and ends, but rising mortgage rates could put a damper on demand in the months to come.
Homebuilders are finally starting to see some relief in terms of costs and construction timelines, said Ryan De Young, president of De Young Properties, but labor continues to be an issue.
“They’re not where I’d like to be nor where we were before Covid, but we’re trending in the right direction,” De Young said.
Fortune reported May 27 lumber futures had dropped 50% to $651 per thousand board feet. In January, lumber was trading at $1,329 per thousand board feet.