With record-low mortgage rates and high demand for new homes, 2021 will be the first year since the Great Recession that home builders will produce more than one million single-family homes. However, persistent supply chain disruptions have caused shortages and price increases in building materials across the US, including materials we use at Maronda Homes.
Record-High Lumber Prices
For example, lumber prices hit historic highs last Fall, with availability becoming a prominent issue. In April, the price of lumber by-passed last fall’s historic peak, now up more than 170% compared to the last 10 months. According to the National Association of Home Builders, these record-high lumber prices add thousands of dollars to your home price, delay construction start dates, and disrupt the closing process.
Steel – Not a Faster Cheaper Alternative – Industry Says
To cope with the challenge, Maronda Homes switched from lumber framing to steel framing on multiple floor plans offered across our Florida communities and subdivisions to be proactive and keep our construction process on the best trajectory.
Historically, steel was cost-prohibitive in these types of homes. When we decided to make the switch, steel was trending at a price of about $350 per ton. We officially went live with steel studs in January of 2021. In mid-January, an article was published that predicted steel prices could rise as high as $1,000 per ton by the end of 2021. Then, in February of 2021, another article was published showing steel prices are now over $1,100 per ton, with allocation looming in the future.
Whether you are looking at steel or lumber, framing our homes has increased exponentially in price and wait time. Homeowners who contracted in Q3 of 2020 did so with lumber at a record high of $300 per board foot. However, today, lumber is well over $1,000. Steel is now in the same boat. Both are scarce and similarly priced. As a result, the cost of framing materials to erect our homes has increased by approximately $13,000 per home.
Building Material Shortages and Shipping Delays
Many builders expect prices and availability of multiple building materials to be the top challenge to face all throughout 2021. On top of lumber, the prices of other building materials such as glass, paint, drywall, and roofing also are up. Delivery delays have also been an issue. Anything with insulation, from windows to siding, is being delayed, extending the build time of almost every Maronda home.
In an attempt to protect us from bottlenecks and shortages, Maronda has been diversifying its supply from multiple vendors. Utilizing multiple vendors helps us keep delivery times on track and the costs of building materials fair. Our supply buyers are constantly looking at the leading edge of materials and supplies to keep our construction process at the top of the market in terms of efficiency and performance.
Lastly, building permits for residential construction are being issued at the highest rate since 2006. Our permitting process times have almost doubled, resulting in backlogged start dates and a lengthier construction process. You can read more about our permitting process here.
We appreciate your patience and your support as we all navigate these unchartered waters. We are working hard every day to produce a high-quality house that you will be proud to call home. Please understand the delays we are facing are unprecedented and due to industry price increases, material shortages, and supply chain disruption. Thank you for choosing Maronda Homes.