By Angela Sisco, RCAC rural development specialist III
It is a national problem, building material costs are skyrocketing. And it isn’t getting better anytime soon. The Building Contractors Association stated that in the United States the total lumber package price for the average home right now is up 208 percent. That is, if you can even get all the lumber you need. In many states (including here in Idaho) rationing has begun, furnaces and furnace coils are altogether unavailable through at least this summer. Builders are closing new builds without them, hoping they will be available before winter. Wait times on everything has gone from weeks to months. Self-Help homes are being held up everywhere because they can’t get windows, siding, trusses, OSB, cabinets, etc. Wire is in short supply and pipe is becoming difficult to get. And there is a latex shortage; yes, that means paint! The next wave is concrete, they are saying there will be an increase of 30 percent to 75 percent by the summer’s end and nothing else has stopped going up yet.
There are several things that have contributed to the shortages and subsequent cost increases, but one thing is clear, it’s all a result of COVID-19. Mills and factories shut down in early 2020 and when they did reopen, they started with skeleton crews. Transportation is an ongoing issue when there are materials to move. This means we survived for quite awhile on inventory that was already out there and now we need to wait it out. When building materials are replenished we hope the costs go down as well.
What grantees have been doing
Order early. Depending on your area, you may need to order cabinets as early as closing, or windows during excavation. Be aware that either you’ll need storage if they come early or an agreement with your supplier to house the materials until they are needed. And with either arrangement, you will need to have insurance coverage.
Change building materials. Grantees have been changing their materials because some are unavailable or because the costs are too high. For example, using CDX instead of OSB (I wouldn’t recommend it) or hydro-seeding instead of laying sod. Just keep in mind, if you stray from your Description of Materials, you will need Rural Development’s approval and significant changes could trigger the need for a new appraisal.
Change house plans. This is changing existing plans to lower costs or materials or both. For example, one grantee in a warm weather climate, is going from a two-car garage to a one car or even no garage with just a parking slab leaving the ability for the families to potentially build the garage themselves at a later date. Another grantee is leaving a bedroom unfinished. Again, Rural Development must approve any changes and these changes can trigger the need for a new appraisal.
Stop construction. It is not ideal and probably not even in our vocabulary, but it is an option. Grantees are stopping construction or not even starting and hoping that prices will be down and materials will be more readily available to start back up again next spring.
But here’s what going up at alarming rates and has gone largely unnoticed or hasn’t been setting off alarms as it should, crime! In my area, construction site crime is up 560 percent over last year, and its only June! It’s no surprise given all that I’ve already mentioned and as this goes on, it’s likely to get even worse. Many grantees have opted to get secure storage, on or off site and/or install cameras out on the jobsite (real or not). A cheap and easy option are trail cams. Some models upload to the cloud so even if the culprit takes the camera, you still get a close up of them! Limiting who has access to closed-in homes can help. Not storing everything for a building group in one participant’s garage is wise (and their insurance company will appreciate it and maybe even continue to insure them if materials are stolen).
The good news is people are starting to talk about prices going down this fall or at the very least next spring. That would happen when inventory is back up and materials are more readily available. The bad news is, I don’t know where they got their crystal ball, but I hope it works!
