How Home Building Costs Have Recently Changed

Q: Are home building costs still increasing the way they were doing the pandemic? Henry, Woodbridge, NJ

A: The cost of building a home depends on what area of the US the house is built. For example, it’s cheapest to build a home in the South and most expensive to build a home in the Northeast.  Home building costs had increased significantly during the pandemic due especially to supply chain issues that resulted from the pandemic and because of labor shortages.  Home building costs have stabilized somewhat since then.  Home building costs had been increasing 20% a year during the pandemic and now that the supply chain pandemic problems have reversed now are increasing by a much smaller amount.  Construction inflation continues however because the labor component of home building costs continues to rise because of the aging construction workforce coupled with reduced interest from younger people in  working in construction services.  This labor shortage issue is not expected to go away anytime soon and will likely continue to affect home construction.  Thanks for your question, Henry.

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