A new study reveals the cost to build an average-sized single-family home in the United States has risen 42 percent since 2018.
MarketWatch is reporting materials to build a new home now cost $35,000 more than they did four years ago, according to the Bank of America study “Who Builds the House,” which detailed the average cost of 14 components that go into building a house.
At the top of the list was lumber, which sucks up more than 30 percent of the cost of building a home, or about $35,000. In 2021, lumber prices hit an all-time high, nearly tripling in price and increasing the cost of building a home by about $19,000 during that time.
Prices of lumber have since come down.
Concrete was next, accounting for about nine percent of the cost of materials, at just under $11,000, followed by windows and doors, which cost about the same.
The increase in prices was due in large part to the shortage of building materials, according to the report, as builders struggled to obtain the necessary items due to pandemic-induced supply chain issues.
“The way home builders describe the supply chain right now is whack-a-mole,” said Bank of America analyst Rafe Jadrosich, who was a co-author of the report. “Every time they find one thing that they fix, another one pops up … there’s always a new category that’s creating the bottleneck.”
Right now, windows are in short supply, which has slowed down the building process considerably because of their importance to the home.
“You can’t finish a lot of the houses if you don’t have the windows in,” Jadrosich said. “You can’t put your appliances in, and paint the walls, and finish your floors, if the house isn’t sealed with windows.”
Of course, rising inflation also contributed to the increase in the cost to build. The prices of items such as floor coverings along with moving and freight expenses have risen sharply, according to the Bureau of Labor Statistics, up 8.9 percent since last year.
[Market Watch] — Vince DiMiceli