We’re not saying anything profound when we say that 2020 and 2021 have been rough in many ways. That’s obvious. Further, the effects of the last year and more have starkly impacted housing, and this includes both prospective homebuyers and those looking to build their own house.
For the latter, there are a lot of issues. Sometimes they can seem insurmountable. But we feel there are ways to, if not completely negate them, at least work around them — and in the process make building a home more accessible to more people.
Simply put: lumber prices have exploded in the last year. There are a handful of factors at play here; wood tariffs on Canada that started before the pandemic, people being stuck at home and realizing they want to remodel, low interest rates encouraging more home-buying and building — particularly among people 55 and older who have more accumulated wealth, and mills and supply chains having anticipated less lumber demand when COVID hit and preparing accordingly, only for that estimate to be way off.
Even more unsettling if you’re planning on building a home or tackling a project on your existing house is that prices continue to rise; per Random Length’s lumber market tracking, prices were up 340% from a year prior as of the start of May 2021, and the trajectory was still shooting upward. The end result is that, across the US, the price of building a single-family home is on average over $35,000 more expensive than before this wood products pricing surge.
In the short term, prices are decreasing or stagnating somewhat, but the trend is still that lumber prices will continue to climb.
And depending on your market, buying a pre-existing house can be prohibitively expensive, too, so it’s not like there’s an easy shortcut to the lumber issue there.
Luckily, there are ways you can get creative when building a house that will help. Granted, you’ll of course still have to deal with those lumber prices, but approaching it from a slightly different angle can make building a home more attainable. And that’s what we want to help you out with!
One of the first steps to take to help combat the expenses of building materials comes back to those low interest rates we mentioned earlier.
Obviously they’ve helped keep the housing market hot, and that competitiveness between homebuyers can be frustrating — but in the end these low rates help make financing your goals more attainable. We recommend putting some extra effort into finding the right loan for you (and locking into that low rate!) even though it might be tempting to nab the first good-looking one you can find.
Another thing that can really help save you some on your initial expenses is in your approach to the actual construction of your home. One way to save money here is by building your house in “portions” in a way. We don’t mean to just do it room by room, but there are aspects of your home that can be built minimally during the initial construction phase when you’re working with a builder, then you can upgrade yourself for less.
There are a handful of good candidates here: certain flooring and higher quality (some might say “fancy”) countertops, many appliances, outdoor spaces, kitchen hardware, lighting, and other things that tend to be more expensive when provided and installed with your builder.
An example of applying this is that you can save a decent amount of money — and have more flexibility — by going with the most basic lighting options to start. The options offered to you by your builder will usually be quite limited to begin with, so it’s a great place to save, then find what you want later from more extensive lighting options.
Similarly, tile work and similar aesthetic upgrades are typically much more expensive when done by your builder than if you do it yourself afterwards. It’s still cheaper in fact even if you don’t do it yourself but instead hire someone just for that job.
Another related way to cut back on initial expenses: if you have plans for multiple bathrooms, guest rooms, or other non-essential spaces, the majority of the work there can be saved for later.
A move like this gives you more flexibility and buys you time — while the mid term projection is for lumber to stay pretty expensive, in the longer term you should benefit from supply chains adjusting from their overcorrection in the beginning of COVID, including mill and processing orders increasing, producing at greater capacity, and more. The end result should be at least some easing of prices.
Combine that with taking those other steps and you’ll further lower your own building expenses. By easing the financial strain and increasing your flexibility and customization, you can create your ideal home while still cutting costs.