With every industry affected by COVID-19, it comes as no surprise that it has affected the housing industry as well. Housing starts are up 30% over last year. There’s also been a huge surge in home remodeling as people are working from their homes more and spending more time at home. Additionally, lower interest rates are contributing to more new homes being built. While all this sounds like good news, this all plays into the demand side of getting raw materials.
This increased demand has caused the cost of lumber to go through the roof, and that is hitting the housing industry hard on all fronts. Lumber prices are now about 112% higher than they were a year ago, jumping 10% this past February alone.
One large factor contributing to this increase in lumber prices is the extreme shortage of lumber. Many lumber mills shut down due to the COVID-19 pandemic, and many of those mills still in operation pulled back on their production due to the uncertainty of what the pandemic was going to do to the marketplace.
All of this has left me asking what I can do to help my clients during this challenging time. I have decided not to attach my general contracting fee to the incremental percentage that lumber has and continues to increase at. Many of my clients have already felt the financial burden of the recent price increases, and I wouldn’t feel comfortable with adding an increase in my general contracting fee to that already increasing financial burden. My clients appreciate this support as it helps them move forward confidently with building their dream home.
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