High Lumber Prices Increasing Home Building Costs
Choose an Experienced San Jose Homebuilder
Creating an accurate budget for your home construction project has become more complicated in 2021. The rising price of lumber is increasing the cost of home building and renovations. In fact, the volatile lumber prices and short supply are making it difficult to avoid cost overruns and supply delays.
As you plan your new home construction or renovation, it’s important to choose a San Jose Area homebuilder with years of experience. To stay within your budget, you want to ensure that your construction company has a strong network of suppliers and vendors, and the skill to avoid costly errors. At Flegel’s Construction, we are working hard to expand our list of reliable suppliers. Our goal is to keep costs down and projects on track for homeowners in San Jose, Cupertino, Santa Clara, and Mountain View.
Anticipate Higher Costs for Home Building and Renovations in 2021
According to the Wall Street Journal, the cost of lumber is four times that of historic prices. Lumber prices have exceeded $1,500 per thousand board feet (mbf), a square foot of wood one inch thick. What does this mean for homebuyers?
Let’s look at how the cost increase impacts your construction budget:
- Although the prices vary by region, at $400 per mbf, it might cost about $9,800 for the framing lumber and structural panels for a 2,000 square foot home. At $1,600 per mbf, the cost of lumber for the same project skyrockets to over $39,000.
- Surging lumber prices have resulted in an average price increase of $35,872 for single-family homes, according to the National Association of Home Builders.
- According to a recent CNN article, the March median home price rose by 17.2%. At $329,100, that’s the highest price since 1999 when the National Association of Realtors started tracking home prices nationally.
What’s Causing the Lumber Price Spike?
Several factors contribute to recent high prices and the volatility of lumber in general. People held off buying or building homes during the pandemic. This led to a drop in lumber prices and the closure of several sawmills. Now that the housing market has heated up again, there’s an unprecedented demand accompanied by extremely short supplies of lumber.
As lumber production ramps back up, you can expect to see a drop in lumber prices at some point, but it is not likely to happen soon. At Flegel’s Construction, we’re looking for innovative ways to keep the total cost of construction down by looking at the following options:
- Using alternative materials where possible
- Providing highly experienced construction managers to help avoid cost overruns
- Scaling down the complexity and scope of renovation and construction projects by focusing on the essentials
We can help you save money on your remodel by planning for realistic timelines and budgets
At Flegel’s Construction, we manage projects with time and cost saving measures in mind. Despite the rising prices for lumber driving up costs of home building and renovations, we can help you realize your dream home. Check out our portfolio of remodeling projects for inspiration.
Contact us to expedite your construction or home renovation project in San Jose, Cupertino, Santa Clara, and Mountain View.