How Building Material Costs Affect Home Buyers
The typical home buyer doesn't spend much time considering the price of gypsum products or ready-mix concrete. But the prices builders pay for building materials has an effect on buyers – even if they aren't shopping for a new home.
That's because new home construction is the fastest way to boost inventory. And, when there are more homes for sale, home prices moderate. So, when more new homes are being built, it benefits all buyers because it helps keep prices in check.
That's part of the reason prices have been rising so rapidly over the past year. Building material costs have been increasing at a fast pace. In fact, according to new numbers from the National Association of Home Builders, material costs have increased almost 20 percent over the past 12 months.
That's made it more difficult for home builders to build the affordable homes needed to bring balance to the market and more choices to buyers.