HOME BUILDERS AND CONTRACTORS ACROSS the country have watched the cost of concrete, steel, plywood, insulation, asphalt, vinyl siding, and other materials soar by upwards of 50 percent the past year. Experts blame the higher prices on shortages stemming from rebuilding in Iraq and China's building boom. Others point to suppliers that quickly hiked prices in response to the surge in demand created by record low interest rates and disaster-related construction and reconstruction.
“We've seen this kind of price increase happen to products before, but this is across the board,” remarks NAHB economist Michael Carliner. “This may be more broad-based than we've ever seen.” Many in the industry do not anticipate price declines, noting that an expected drop in sheet-rock costs in recent years failed to materialize. While custom home builders have been able to pass the higher prices to buyers, high-production home builders cannot do so as easily in every market.