THE LAST COUPLE YEARS have seen price hikes in almost every material and product you use. Not slow, progressive increases, but the kind that make your hand shake when you sign the purchase order. Plywood and oriented strand board, for example, have more than doubled in price in the past year alone. Cement is becoming the new liquid gold that can make or break a construction schedule. Gypsum, nails, insulation—you name it—almost every commodity material has shot up in price. The impact on overall house cost varies by region. The Metropolitan Builders Association, based in Waukesha, Minn., figures that this year's hikes have added $16,000 to the cost of a 2,300-square-foot home. NAHB economists put the figure lower on a national basis—estimating between $5,000 and $7,000 of material-induced construction costs.
Experts blame the cost increases on the convergence of rapid global growth, unbalanced trade tariffs, and localized disasters. Asphalt products respond to the volatility of Middle East oil markets. Plywood is in short supply due to huge demand in the hurricane-slammed Southeast, along with rebuilding Iraq. In Florida, homes often require an extra month to complete now, due to cement shortages. To top it all off, rising economies overseas, especially China, have become focused on a building boom of their own.
According to global economists at Grant Thornton, a global tax and consulting firm with offices in Washington, China's exploding demand for imported building materials has tied up shipping lines to and from Columbia, Thailand, and China that would normally be used for carrying cement to the all-consuming United States.
As privatization and Western-style consumerism take hold in Asia, the makers of insulation, waterproofing, HVAC systems, marble, tile, and bathroom fixtures may be cheering, but builders may not like the result, if demand outstrips supply, and prices rise in the United States on even more items.
In the short term, the NAHB is pushing for relief from Mexican trade tariffs that restrict imports of cement from our Southern neighbors. But looking farther out, builders may have to rethink ways to keep costs down with alternative materials or offer further political challenges to U.S. trade policies.
One of the most promising technologies being developed for future building materials is turning agricultural products such as wheat and straw into wall panels and even into structural components. Wheat, in particular, has shown potential for use in biodegradable plastics, along with wallboards and building panels. The idea of compressed straw panels has been tossed around since 1935, but new pressure on resources has made this a growing niche.
At Pyramod International in Grass Valley, Calif., president Robert Glassco sees a huge need for affordable housing worldwide that straw can help solve. The company has developed a product called monocoque that allows a home to be constructed without conventional materials.
“The strength is in the shell,” notes Glassco. “Our design is stronger than a stick-built house, but we don't use 2x4s or anything. We are now expanding to build housing all over the world.”