COVID Causes Costs to Rise
It is an understatement to say that COVID-19 has taken a toll on the nation and many of its industries. Habitat for Humanity, unfortunately, did not escape its effects. Though there are many ways in which fallout from the pandemic has affected Habitat Monroe, one of the toughest ways has been the massive increase in lumber costs.
Lumber is obviously the most important component of homebuilding so the costs have been unavoidable for Habitat. The same 2×4’s purchased last year for $2.80 apiece are now $5.45 per board, depending on the type. Habitat Monroe has already spent upwards of $12,000 on framing for their home on Grand Blvd.
This isn’t only a problem for Habitat; builders all over are dealing with increased material costs. According to the National Association of Homebuilders, the price of lumber risen to an average price of $740 per thousand board feet.
There are a number of factors leading to this price increase but the problem is simple: production can’t keep up with demand. The pandemic shut down entire states during the worst of it, meaning that wood mills stopped production during these months, and production in the U.S dropped by 6.8 percent.
Theories have suggested that since people are spending more time at home than pre-COVID, they’re doing more renovations. New homeowners are also renovating as interest rates are at historic lows in the U.S., leading many to pursue homeownership this year.
Rising costs are creating issues along the whole chain of Habitat’s homeownership program and on the grander scale of affordable housing.
Large-scale builders have the capacity to eat the higher costs during building but when it comes time to sell, the increased cost of materials will trickle down to the buyers. This trend is already showing up on the housing market, since April 17 of this year, the price of an average new single-family home has increased by $16,148. As homes get more expensive to build, they will be more expensive to buy and more barriers will be in the way of affordable homeownership.
Currently, Habitat homes are not appraising for the same value that it takes to build them. As material costs increase, the funds raised from a home’s sale will significantly decrease, meaning that there will be fewer funds to build the next home with.
If there was ever a time to support Habitat Monroe, it would be now. The COVID-19 pandemic has ravaged industries and stressed the importance of home. But it did remind us that we are all in this together and that Habitat is a grassroots organization. We rely on our generous supporters and have built 103 homes over 25 years because of them. We will continue to face these hurdles together.