Maybe the headline is a touch overdramatic, but it was too hard to resist. In case you haven’t heard, construction material prices have been sky-high and rising for some time now. Just for an example, according to the NAHB and Random Lengths, lumber prices have risen from $251.20 per thousand board feet in January of 2012 to around $580 today.
Now we introduce some new players, The Tariffs. Robert Dietz, Chief Economist at the NAHB, recent stated Canadian lumber tariffs have, “pushed up the price of a typical home by $9,000.” (That’s for the Dallas/Ft Worth market, by the way. You can bet it’s more here). The country’s largest nail manufacture claims they may be out of business by Labor Day due to the 25% tariff on imported steel. None of this bodes well for building more affordable homes.
Add to this the shortage of construction labor and rising interest rates and it’s obvious our industry faces some serious challenges despite the hot housing market currently. The advent of new construction methods like pre-fabricated wall panel construction and 3D printing may become even more important than previously thought. I still think we’re going to be just fine for the foreseeable future, but change is on the way.