Wood costs have more than doubled in the past year. With many of the wood products needed to bring a home to life, this has led builders to lose big bucks and homeowners to find their construction budgets on the rise.
âWe’ve seen small adjustments here and there, but nothing to this extreme,â said Tim Winter, owner of Paradigm Building Group in Fairfax, Virginia.
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âOn the total cost of the home, you’ve seen a 25-30% increase,â said Howard Saslow, vice president of operations for Rockville-based Classic Homes of Maryland.
Wood costs have more than doubled in the past year. With many of the wood products needed to bring a home to life, this has led builders to lose huge profits and homeowners to increase their construction budgets.
The biggest challenge for his business, Winter says, is dealing with uncertainty, with prices fluctuating very quickly. He said his company contacts suppliers weekly on pricing, so they can better plan what’s to come.
Lumber futures are down, but Saslow said the impact of that had not been seen in lumber yards. Saslow believes that while prices may come down, they will continue to eclipse what has been seen during the pandemic.
âIf anyone expects them to return to pre-pandemic levels, they will be sorry. It won’t happen, âSaslow said.
According to Saslow, his company pays $ 50 to $ 60 for Oriented Strand Board or OSB, a type of engineered wood similar to particle board. Before the pandemic, it cost around $ 10. Likewise, the cost of the studs used for the framing of a house has more than doubled.
Saslow and Winter both said the price of lumber is not just going up. Windows, drywall, insulation, paint, steel and even labor costs are on the rise. Saslow said the cost of a steel garage door they use has seen four price increases this year. The cost of plastic has also increased.
Home builders also face delays in getting many supplies to construction sites. Winter said the cabinets have long lead times.
âPreviously, we could get them within seven to eight weeks. Now, depending on the material, a game could last anywhere from 14 to 16 weeks, âWinter said.
Saslow said there have been a few instances where his customers have moved into their homes without all appliances in place because deliveries are very late. This left home builders choosing to purchase what is needed for a project much earlier in the process.
âWe now need to focus on logistics, much more closely than in the past,â Saslow said.
Winter and Saslow both said that with many contracts signed before the price hike, they were doing what they could to lessen the blow to customers, which had a negative impact on their profits.
Saslow said that at the start of the pandemic, there were concerns that some home builders would not survive. Then came a surge in demand in the fall that boosted morale. Unfortunately, this was followed, he said, by the continued increase in material costs.
âNow we’re saying we’re doing all of this work and there won’t be a lot of profit to be made from it,â Saslow said.
Both men said the higher material costs did not deter people from moving forward with their construction plans.
âA lot of people still want to build a house or do a major expansion or renovation project, it hasn’t slowed down even knowing the cost,â Winter said.
As both home builders adjust to the new standard in their industry, they both said they are happy to have as much work as they have. The two are now reporting more contracts than they had before the pandemic.
Winter said business had grown by at least 40%, and Saslow said his business was on track to have a record year of building homes next year.
âWe’re just thankful for the jobs and the business we do,â Saslow said.