Home building costs on the rise

"There is a big demand for labor and materials and just trying to get those things in stock for your house might take a little bit longer than it has in the past."

FARGO, N.D. (KVRR) — If you’re looking to do some home renovations or even thinking about building one, you may have to dig a little deeper into your pockets.

“We’ve had a house that we built last year, and we priced it out in the summer and when we built it in the fall it increased about 30 percent in the lumber cost only,” Home Builders Association of Fargo-Moorhead President, Kim Hochhalter said.

Kim Hochhalter, Vice president of Building Concepts and President of the Home Builders Association of Fargo-Moorhead says the rise in lumber material costs is due to the increase of demand and decrease of supply during the pandemic.

“We had the shutdown, and everybody started to do work in their homes, and we didn’t anticipate that. Then it filters over into a loss of inventory out there. We weren’t building as much nationwide. So, it all made this one big fireball that hit right now where the materials are hard to get and the demand is greater than the product,” Hochhalter said.

Even with the high cost of building materials, Hochhalter says right now is the perfect time to build or even purchase a new home.

“It’s great to purchase a home or build a home right now with the interest rates. It’s never been this low and it’s awesome for mortgages. Even though we’re seeing an increase of 20 to 30 thousand on a house because of material costs, a person has to weigh that with what they would get with interest over a long term,” Hochhalter said.

People looking to get started on that home building project should remain patient.

“There is a big demand for labor and materials and just trying to get those things in stock for your house might take a little bit longer than it has in the past. So, just planning to have a little more time would be good when you’re thinking about building,” Hochhalter said.

Hochhalter says it’s hard to estimate when the costs of materials for home building will return back to normal but once they do, she isn’t sure if the low interest rates may be there as well.