The copper that makes up electrical wiring and plumbing pipe costs a third more now than it did in October. The price of oil, which goes into everything from vinyl flooring to roof shingles, is up more than 80 percent this year. Lumber is twice as expensive as it normally is at this time of year.
Prices for brick, concrete blocks, granite for countertops, and insulation all have set records this year.
The rocketing price of materials has pushed the median U.S. price of newly-built homes in January to $346,400, according to the Federal Reserve Bank of St. Louis.
American Homes 4 Rent, which plans to build 2,000 stand-alone rental houses this year, has seen its lumber bill for a single house rise from about $10,000 to as much as $25,000, the company told the Wall Street Journal.
Rising lumber costs have added $24,000 to the cost of the typical newly build home and $9,000 to the cost of building a single apartment, according to the National Association of Home Builders (NAHB).
“Current prices represent an intolerable, and frequently insurmountable, financial burden to home builders and contractors,” the NAHB said in a statement announcing the price rise.
The group has urged U.S. Commerce Secretary Gina Raimundo to take steps in increasing domestic lumber production, especially in the wake of years of devastating wildfires in the western U.S. that have slashed timber stocks.
Despite high home prices, rock-bottom interest rates have driven strong demand for new houses. However, with interest rates creeping up again, the housing market could cool, bringing prices down from their recent heights.
TREND FORECAST: We note these dramatic price increases to illustrate how inflationary pressures are rapidly escalating but, at the same time, they are being played down by the Federal Reserve and Washington, as they promise to keep injecting more money into the economic system.
And now, with more lockdowns across the globe and states on hold in the U.S. to open up, the economies will sink deeper, and yet more cheap money will be injected to artificially prop them up. In turn, currencies will depreciate, inflation will rise, and safe-haven assets will increase in value.
