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Hello friends!

I hope you're having a fantastic summer. For us, this summer has been full of gardening and landscaping. It's our third summer in the new house and we're finally getting into a groove.

Now we're back and ready to help you become a more efficient and informed homeowner.

Industry Stats and Trends 📊

Homeowners are subject to the whims of the construction industry. It's a familiar story... You get a quote on lumber that becomes a part of the estimate for your home. Then, when it's time to build, the price of lumber has changed significantly and your budget feels the pain.

Unfortunately, we are virtually powerless in this situation. The residential construction industry is enormous and constantly changing. What we can do is keep tabs on the changes and trends in the industry. Let's look at a few.

Lumber Prices 🪵

We've seen wide swings in lumber prices over a few years. The highest price in the last five years was in May of 2021. According to NASDAQ, the lumber (LBR) commodity price was $1,482. As of August 11th, 2023, the commodity price was $496. That's a huge change in two years. In fact, the price has decreased precipitously since mid-July.

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Permits and US Housing Starts 🏡

Another factor in the price of construction is the demand for builders. If builders are seeing a lot of demand, prices for labor may increase. Housing starts are one way to measure this part of the industry. This measure is based on single-family residential construction in the US and is tracked by the Census Bureau.

Below you can compare housing starts to permits and completions as of June 2023.

• Permits for privately‐owned housing units decreased by 15.3% in the last year
• Privately‐owned housing starts dropped by 8.2% in the last year.

Container Shipping Rates 🚢

New homes depend on goods that are shipped in large shipping containers. When shipping costs increase, the goods are often more expensive. Since 2019, shipping rates have changed significantly. Thankfully, we seem to have moved past the astronomical prices we saw in 2021.

Summary

We've been through a lot in the last few years. The residential construction industry saw wide swings of demand and pricing. Thankfully, it appears the industry is getting back to normal. We could be entering a phase where builders are seeing less demand, as evidenced by the recent decrease in housing starts and new permits.

Of course, interest rates are a factor in many project budgets. Many analysts believe we are past the peak of inflation and the risk of a major recession. It would be welcome news to see interest rates stabilize and possibly even decrease in coming years.

The best we can do is plan and prepare. Talk to local builders and architects about what they are seeing in your location. You might be able to find the right window for your build.

That's what I have for now. I'll be in touch again soon!

Lee LeFever, Build Livable​

• Build Livable helps homeowners navigate custom home construction. Learn More.
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