Builders are becoming concerned of what the building cost could become in 2017.  Building material cost have risen 25% from last year according to the National Association of Builders.  In 2016 building material cost weren't a major concern to builders.  This is because builders could still make a profit after the sale of the build, and could keep cost affordable for customers who wanted a new home.  Now that the cost of building a new home could significantly increase, they are worried about pricing and profit margins.  One of the biggest reasons for the increase in building materials is due to the lumber agreement between the U.S. and Canada.  At the end of 2016, lumber imports came to a halt, and is pending an investigation into unfair import practices requested by the US lumber coalition.

Most Builders Aren't Greedy

       Builders obviously want building cost to be lower so they can sell the new build at a lower, more affordable and competitive price.  A good way to think about it would be to think of new home inventory vs. existing homes.  If a new home cost is close to the dollar amount per square foot of an existing home to build, then people would be more acceptable to build.  Whereas, if the new home cost is significantly more to build then people would tend to buy existing homes.  Builders normally want to give consumers the lowest price they possibly can and still make the same profit.  This will make them more competitive in the market and keep business thriving.  If the building cost goes up, so will the purchase price to the consumers.  This doesn't mean the builders are greedy, they are just looking to keep their profit margins the same.


Here are the top 5 concerns that builders think will raise the cost of new-home builds.

1.)  Labor Cost: 82% - Laborers are in more demand therefore the cost of labor will rise.

2.)  Lot Prices:  67%

3.)  Impact, Hook- up, and inspection fees: 61%

4.)  Building materials:  60%

5.)  Federal Environment and Regulations and Policies: 52%