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Hello friends!

Last week, we discussed 10 Ways to be a Great Home Construction Client. This week, we're taking a look at trends in the home construction industry and what the recent data can tell us.

Lumber Prices

Few things change the cost of a new home more than price of lumber, which is a commodity. Small changes in the market can cause a ripple effect across multiple parts of your project. Thankfully, after a couple of peaks during the pandemic, prices are closer to 2019 levels.

Here's the most recent chart from NASDAQ:

A Huge Change

Nearly two years go, the cost of lumber was over $1,481 per 1000 board feet. On April 3rd of this year, it's just over $370. That's a change of about 75% in two years. Amazing. We can all be thankful that the lumber market seems to be back to previous levels. Let's hope those big spikes are behind us.

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.

"US Housing Starts is at a current level of 1.45M, up from 1.321M last month and down from 1.777M one year ago. This is a change of 9.77% from last month and -18.40% from one year ago." Source​

As you can see, there was a huge dip in housing starts when the pandemic hit in 2020. Then the market heated up, possibly because people focused more on home-based lifestyles. Today, the market is still higher than pre-pandemic levels, but has seen a reduction in the past year.

What You Can Do

Like any kind of investing, it's very difficult, if not impossible, to time the market. Construction can be seasonal and regional. Your best bet may be to talk to local builders and architects about what trends they are seeing in your local market.

Recent Posts

• ​How to Get Ahead with Your Creative Brief​
• ​Designing Your Home for Wildfire Safety​
• ​Trends in Lumber Prices and Housing Starts​
• ​10 Ways to be a Great Home Construction Client​
• ​How to Save on Cost Per Square Foot​
• ​Red Flags When Hiring Contractors​

👉 All Issues of Owner Notes​

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That's what I have for now. See you next week!

Lee LeFever, Build Livable​

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