You’ve probably heard the news that the prices of lumber are at an all time high and that’s why the prices of new homes are increasing, too. Although that’s true, it’s not the reason why many people are hesitant to buy a home.
The Pattern of Lumber Prices
Lumber prices have gone up and down over the years. The lumber demand rose significantly because of the increase in remodeling projects and surge in new home building. There’s also a shift to people desiring bigger houses, which meant more demand for lumber.
Although the pandemic has disrupted a lot of things, including the building industry, there’s already an existing domestic lumber supply insufficiency. Mills have cut down the production but continue to operate because of the increase in demand.
However, there’s no need for new homes Myrtle Beach buyers to go for resale over new ones. Custom home builders are dealing with this issue in various ways. And even though the cost of new home building is higher than the purchasing an existing house, you can still enjoy the long term savings of having a new home.
How do new home builders handle high lumber prices?
About 90% of new homes use wood frames. A recent survey by the NAHB found that they’re using several methods to deal with the rising prices of lumber. Nearly half of new home builders are adding escalation clauses in their sales contracts that would cover the higher costs because of the lumber prices. Around one third are preordering the lumber they need when prices go down to avoid purchasing them at a higher price. Meanwhile, other builders prefer to delay their sales or building when the lumber prices go up or to pause their building activities after framing so they can wait for the prices to drop.
What are the benefits of building new homes?
Homebuyers are almost always concerned with affordability. Low mortgages have kept houses in the affordable range for first time home buyers even with the higher prices.
First time buyers often look for entry level affordable houses, which is why they purchase existing houses. But the price gap between existing homes and new custom homes has narrowed so that the costs of buying either are the same.
Despite the rising costs of labor, lots, and materials, the price point as well as appreciation for the advantages of new homes brought more firsttime homebuyers into the market Millenials make up the bulk of the number and they are far more willing to buy a house that’s located on a smaller lot or even a townhouse. . However, these options tend to cut back on the home costs.
New homeowners enjoy various advantages over resale houses. They will have the peace of mind knowing they are the first one that used the house. They participate in the designing of the home and the operational costs of new houses are less than an existing one.
Call Dawol Homes now if you are thinking of building a new home in Myrtle Beach.