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Inflation increases the cost of home construction projects,
The home improvement business is grappling with persistent labor shortages and supply chain issues,
as some industries begin to recover from the Covid-19 pandemic.
While the prices of home renovation projects continue to raise,
consumer inflation rates increased by 7.9% between February 2021 to February 2022.
The increase is the largest in more than 40 years,
according to the latest Consumer Price Index released by the US Bureau of Labor Statistics (BLS) in March 2022.
This rise is evident across the various product categories in the home improvement sector,
causing construction project expenditures to rise.
While building materials costs rose by 31.3%, from early 2020 to early 2022,
with the index rising 10.6% in the past five months.
Statistics from housing and home improvement organizations,
the BLS, and Associated General Contractors of America paint a clear picture that these 10 materials continue to add more dollars to remodeling budgets.
Concrete
The cost of products is clearly increasing, since the beginning of the epidemic;
the producer price index rose by 7.6% in 2021, and grew by another 4% just a few months into 2022.
Bricks and concrete blocks also saw a 2.8% increase, over a two-month period,
and the price of ready-mix concrete increased by 3.2% from fall 2021 to February 2022.
Gypsum
Gypsum products continue to contribute to increasing home renovation budgets,
as gypsum products (which include ceiling tiles, plaster and drywall) are an integral part of most remodeling projects.
Gypsum products increased by 20.7% in just 12 months,
although the prices of gypsum products witnessed a decline of 1.3% at the beginning of 2022.
Wood
The availability and price of sawn timber has become a major concern for renovation projects due to increased demand,
supply chain issues, labor shortages, and high tariffs.
According to the National Association of Home Builders,
lumber costs increased the price of a single home, by more than $18,600 from fall 2021 to January 2022.
Softwood prices in particular continued to rise, thanks to increased Canadian lumber tariffs,
with the cost increasing by 79.5% from September 2021 to January 2022.
4. Steel
The price of steel has risen 74.4% since 2021, and the price of this material has been hit particularly hard;
however there is some good news.
While steel mill products such as structures and roofs still cost more than in previous years.
Prices have fallen in this category since the start of 2022,
and costs have fallen by 9.9% in February alone.
5. Paint
Simple paint projects will cost more than they did in 2021,
although numbers remained stable in February 2022.
The price rose 30.3% for exterior paint and 21.2% for interior products in one year,
and the price of architectural coatings increased by 20.3% from 2021 to 2022.
Inflation increases the cost of home construction projects
6. Insulating materials
New and reconfigured interior spaces need insulation to maintain the home’s energy efficiency.
This will cost an increase of 17.8 percent from early 2021, with an increase of 5.4 percent since November,
as various insulation products continue to show an increase in overall cost.
7. Plastic building materials
Plastic building materials are common in construction projects today,
and appear in many applications, including pipes, seals, windows, doors, and more.
The price of this category unfortunately jumped 35.6% between early 2021 and early 2022,
cost jumped 4.4% in November 2021, and rose another 1.3% in January 2022 alone.
8. Furnishings
If you plan to spend this year’s remodeling budget on remodeling your interior,
be sure to consider the increasing cost of furniture.
The cost of living room, kitchen and dining room furniture, according to the BLS,
increased at a rate of 2% per month for a total change (not adjusted for seasonal increments) of 19.9% in a year.
9. Hardware
Kitchen remodeling is one of the most expensive interior renovation projects,
the higher hardware costs will not help your bottom line.
According to recent data, prices of appliances have increased by 7.3% in one year,
and this includes kitchen appliances, as well as washers, dryers, and other major household equipment.
10.Hardware and tools
Don’t forget the cost of nuts and bolts, as well as other tools and supplies, construction hardware and tools prices have continued to rise throughout 2021.
It recently saw an 8.7% increase from February 2021 to one year, according to the BLS.
How do you keep your expenses
With the costs of everything from groceries to home renovations rising, it’s more important than ever to find ways to save where possible.
Here are five quick tips to make it happen:
- Get multiple quotes for projects.
- Do the demolition yourself.
- Monitor sales, benefit from price matching, and buy used equipment.
- Save some of your budget for the unexpected.
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