Single-family housing starts in 2010 totaled 475,000 – a 7 percent increase over 2009 but still substantially below the 1,256,000 average starts per year from 1995 through 2003. .Think the decrease in demand for new home construction has resulted in lower prices for building materials. Think again.
Prices for materials used in construction actually increased 5.4 percent in all of 2010. Prices increased at double-digit rates over the year for four key construction materials. Diesel fuel prices climbed 28 percent in 2010; steel mill product prices rose 12.5 percent (think rebar, nails, kitchen sinks, appliances, etc.); copper and brass mill shape prices were up 12 percent (think electrical wiring, water supply valves and fittings); and prices for aluminum mill shapes rose 12 percent over the year. Other items that contributed to the climb included lumber and plywood, 5.7 percent; architectural coatings, primarily paint, 1.5 percent; brick and structural clay tile, 1.0 percent; gypsum products, 3.4 percent; asphalt, 4.6 percent; and insulation materials, 4.4 percent. The National Association of Home Builders predicts single-family housing starts will increase 21 percent to 575,000 in 2011. Although the demand for construction in the United States will remain relatively weak, the price increases are likely to intensify in 2011 as global demand for construction materials grows.
Have you been waiting to build your new home or remodel your existing home hoping prices will continue to fall? You might have already waited too long.
Chuck Miller GMB CGB CGP CAPS MIRM CMP MCSP CSP
President / Builder – Chuck Miller Construction Inc.