Lumber prices are increasing, and this trend will only continue.
New home prices are skyrocketing due to an increase in lumber costs. Compared to this time last year, the cost of a lumber package for an average-size house has increased by $35,000, and this cost will continue to rise. Gas prices are also going up, along with the cost of labor. Basically, everything is going up—that’s called inflation, my friends. The good news, however, is that interest rates are still in the low 3s.
If you have a client working with Fulton Homes, you may know that they recently sent out a letter to all of their homebuyers saying that they would return 100% of their earnest money if they could cancel their contract within a week due to construction delays. When I heard this, my first thought was that they wanted people to cancel their contracts because they knew they could sell those homes now for $40,000 to $60,000 more than they did a couple of months ago. I believe that with every new home that’s been sold in the past three to six months, builders are probably losing money on it due to the increase in lumber costs.
If you have questions about this topic or there’s anything I can help you with, don’t hesitate to reach out to me. I’d love to be your mentor, and I hope you have a great day.