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Soaring cost of building materials delays home builders, remodelers

OLMSTED COUNTY, Minn. (KTTC) -- During the past year, the cost for building materials has skyrocketed. Prices for things like lumber have doubled or tripled.

Mike Paradise, President of Bigelow Homes in Rochester, has been in the home construction business for 40 years. He says he has never seen the price of lumber and other building materials this high.

"You can see on these charts, there's normal ebbs and flows in the prices," Paradise said. "But notice how it continues to rise at the end of last year and it continues to go up into 2021."

But why is this happening?

"Probably the biggest one in my mind is that we really anticipated a downturn in the industry due to the pandemic and the opposite happened," Paradise said. "I mean with the interest rates being so low, the demand for housing being so high, and realistically we were in a housing crisis before the pandemic. I don't think we were prepared."

And then on top of that, the manufacturing plants were hit hard, creating a major disruption to the supply chain.

"So the prices continue to go up," Paradise said. "I mean in an average size home, we've seen lumber go up $25,000 to $30,000."

Paradise attributes the low interest rates on home loans to allow customers the ability to build a new home despite the rising material costs.

"So they can still financially make the decision to build, it's just unfortunate that a lot of their extra buying power goes towards these skyrocketing costs," Paradise said.

But because of the issues in the supply chain, Paradise says nearly two to three months have been added to the construction process.

"Take trusses for example, they are out 12 weeks," Paradise said. "Some of our cabinets are out six weeks. Our windows can be out that long also."

Now it's just a matter of waiting.

"And we just need the inventory," Paradise said. "We need to get more materials back in the market. We need to fix our supply chain before we see that come down."

Paradise says he doesn't know when the cost of building materials will go down, but expects them to stay high through the summer. He hopes costs will start to fall in the fall.

Sarah Gannon

Sarah Gannon

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