Building Costs Soar to Record Highs Across West Michigan

Since March of 2020, we’ve experienced unprecedented circumstance’s in West Michigan with new home construction. Obviously, the issues surrounding Covid 19 caused a domino effect to many other areas of the residential building industry across the country. The apparent outcome of this pandemic has equated to one primary outcome that resulted in builders and their customers experiencing record-setting construction costs to build their homes.

Key Factors

1. Disruption to the lumber supply chain (reduced supply) across the US and Canada.

2. Lumber costs rising 300%-400% over the last 15 months.

3. Significant demand for lumber across the country due to a variety of factors.

4. Extremely low inventory in the housing market.

5. Low interest rates with bank financing.

6. Skilled trade contractors in high demand.

What’s Next?

The lumber supply chain is starting to show some movement in the right direction to help lower building costs. Those who were presented painful construction budgets in the $350K-$700K price range can have a better outlook for better pricing this Fall or Winter. How big of a dip will we see? It is hard to say, but we believe there is a 5%-15% correction on the way vs. what consumers have experienced this Spring and Summer.

If you held off on your building project this year due to the cost to build, we urge you to start planning your project as prices normalize. We don’t know for sure, but we think there will be pent-up demand in the Spring of 2022 due to so many waiting for the dip in the market. Consider taking steps in finding your building site, completing your home design, and understanding financing requirements (we’re here to help).