How Builders can Navigate Sudden Price Shifts

Credit for this article goes to Mary Salmonsen, Builders.

Out of all the factors that affect the sales price of a new home, materials price changes had the biggest impact in 2018, according to Tony Callahan, president and CEO of Kennesaw, Ga.–based Callahan Consulting Group.

“It would be easier to list the products that haven’t risen in price,” Callahan says. “I have seen increases in lumber, laminate flooring, luxury vinyl tile, luxury vinyl plank, quartz, garage door openers, drywall, insulation, roof tile, roof shingles, HVAC equipment, appliances, fiber-cement siding, and windows, plus labor in many trade categories. Lumber is the only one to fall back down in price.”

The impact of these price hikes is staggering. As tariffs were taking hold in 2017, Paul Emrath, vice president of surveys and housing policy research at the NAHB, estimated that they could lead to a $1,360 increase in the price of an average single-family home and a $1.1 billion loss in single-family home investment overall."

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