Building material costs have soared 26.1% on average over the past 12 months, according to a recent survey of single-family builders asking how much costs have increased for the same house over the last year. It’s no coincidence that this same May survey for the NAHB/Wells Fargo Housing Market Index reveals that a record number of builders reported material shortages across the board.
A plurality of builders (28%) reported that material costs increased by 20-30% over the past year. Another 15.9% indicated that costs increased by 30-40%; 5.9% said costs rose by 40-50% and 15.2% indicated that their costs had soared by 50% or more.
On average, the 12-month increase in material costs for the same house was 26.1%, by far the highest percentage cost increase ever recorded in an NAHB survey. The previous record was 6.1% in 2017.
Material availability and costs are one of several factors, including the cost of regulation and a general shortage of construction labor, limiting the supply of housing, particularly for the entry-level market where additional inventory is badly needed.
Reference More on NAHB Senior Economist Paul Emrath provides more analysis in this Eye on Housing blog post.
Clean and Pink is an official members of the National Home Builders Association. Additionally seeing these trends in Skyrocketing materials in the Greater Memphis Areas.