How The Rising Cost Of Lumber Is Actively Impacting The Market For Existing Homes

In a world where housing inventory has already been a top concern for years, homeowners and builders alike have a new factor to keep in mind. Regardless of politics or a pandemic, demand is outpacing supply due to the rising cost of lumber prices. COVID, trade tariffs, and relentless wild fires on the West coast are a few main causes.

There are a couple of tips to keep in mind with this currently impacting the market for existing homes.

First, if thinking about building during this time, home owners will benefit from first making sure they have a final quote to remain within their budget and timeline. As a former chairman for the National Associations of Home Builders notes, “Builders have had to give [customers] their deposit back and say, 'I can't build your house because of the price of lumber'." Staying ahead of this will help to avoid any consequences linked to delays. 

Second, communication with a lender (and contractor) is key. This will allow clients to avoid the potential frustration of securing a loan, being blindsided with a higher quote, and having to try to increase the value of the loan at the last minute. Plus, it will help ensure thousands of dollars that have gone into permit fees and deposits with contractors aren't wasted.

Overall, housing demand is still incredibly strong and is expected to remain high for the near future. As for next steps? Clients who are thinking about buying a lot and building will want to consider all options. Right now, they may be better off buying an existing home, even if it's not 100% perfect.

Don't hesitate to contact me and I can help walk you through the process!

*Article provided by Matt Tarka, Sr. Mortgage Loan Advisor with Flagstar Bank.

Matt.Tarka@flagstar.com