Over the past year, recorded data states that building products have surged over 19% and only continue to increase. Along with many other fields, real estate is being heavily influenced by the inflation. As a result of this, some of the materials being affected by this increase are, lumber, asphalt, steel, and copper. Steel products at over 80% and lumber products at around 40% are reporting to be the highest in pricing growth this year.
Inflation is caused by low-supply and high-demand.
The unavailability for these raw materials can be seen across many countries. In America, the necessity for them lies within the renovation boom, infestations in pine beetles in Canada, and the pandemic causing production delays. When considering the real estate market, costly building materials can drive up building costs. This will not only increase a property cost but also limit the amount of people who can manage to build a home. Since April of 2020, the median home price has escalated more than $30,000 due to the upsurge in lumber costs.
As we persevere throughout the pandemic and near the end of the year, it will be insightful to see the aftermath of material shortages. The best-case scenario is production continues to readily steadily and the demand can level out.