Changes in new construction could have a pretty significant impact on the real estate market. I’ll go over what to expect today.
How are changes in new home construction going to affect the market?
If you look at the chart above, you’ll see what builders are expecting in 2017 compared to what they actually faced in 2016. This year one of their biggest concerns is building material prices.
The reason for this is that the United States has a softwood lumber agreement with Canada and they are at a stalemate in negotiations pertaining to unfair import practices for lumber. Until that gets resolved, we are likely to see much higher prices for lumber and other building materials. In fact, from February 3rd to February 10th, the framing lumber composite price rose from $366 to $391, which is the largest weekly price jump since August of 2003.
When the builders have to take on these costs, they have to pass it on to the consumer. So, if you are looking to purchase a new construction home, you’ll want to keep in mind that prices of new construction homes will likely be going up. If you’re a seller, the uptick in new construction prices could bode well for you too, as that might increase the value and demand for your home.
If you have any questions, please don’t hesitate to give me a call or send me an email. I look forward to hearing from you!