While the real estate market is still somewhat mired in a recession, there are definite signs of life. Over the last 22 months, housing builds have slowly crept upward every month. This means that the materials and, more importantly, the skilled labor needed to build these homes has become increasingly less available.
As with any other commodity or service, the building of new homes is subject to the law of supply and demand – and a shortage in one means that its cost will increase. For example, lumber costs have increased by almost 20% over the last two years. Similarly, labor costs have not only risen, but many builders are finding it increasingly difficult to find the workers to simply get their projects completed on time. Although demand was down and only now beginning to increase, production is way down. Many gypsum plants and lumber mills shut down or slowed production when housing construction dropped off.
While new homes will always be a popular option for homeowners, right now may be the best time to buy one. Not only will you get the home of your dreams, but you will also be making a wise financial decision as the value of your home will rise as costs rise.