An increased cost to construct is causing the price of a new home to soar. Rising lumber costs in particular have added more than $16,000 to the typical cost of a new single-family home according to a new report. The National Association of Home Builders is reporting that more than 2.1 million U.S. households are simply priced out of the market for a median-priced new home because of the surge.
Average lumber prices have risen by more than 170 percent since April to a new record high of $800 per 1,000 board feet. Home builders are imploring the government to take action saying that without an increase in supply and cost controls, a slowdown in new construction is inevitable. Meanwhile, home buyers in the U.S. are crying out for an increase in housing inventory as the chronic shortage is leading to fierce bidding wars further driving up prices.
Multifamily apartment construction is also feeling an impact at a time when city dwellers are seeing rent prices soar.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 2.875 percent and 15-year rates are near 2.5 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.