Construction Costs, Interest Rates Likely to Rise

If you are looking to build a new home, do it now, according to the National Association of Home Builders (NAHB). Construction costs have fallen during the housing crunch, but are steadily creeping back upward. According to an article in the Los Angeles Times, nine years ago construction costs made up one half the price of a new home, but now accounts for three-fifths. In December, the producer price index, which measures the price of selected building materials, was up 4.5 percent, its largest increase in 2010, as published by the Bureau of Labor Statistics. Nine years ago builders were averaging a profit of 12 percent on a new home, but in 2009 that had fallen to 8.9 percent, and is thought by the NAHB to still be declining. Bernard Markstein, vice-president of forecasting and analysis at NAHB, said, “Builders are not going to build at a loss. All the commodities are up, but lumber is probably up the most.”

mas kovach mhpronews shopping with soheyla .jp

Get our ‘read-hot’ industry-leading 

get our ‘read-hot’ industry-leading emailed headline news updates

Scroll to Top