Purchasing a new home is an exciting prospect. As an investment in your future, your property should reflect your lifestyle and match your needs. Building a home from the ground up allows you to do just that by giving you full control over its design and layout.
Going with a new construction also helps to ensure the structural integrity of your building for years to come. While older homes may be charming, they may not meet the applicable building codes and can require unexpected repairs down the road, after years of use and weathering. A new construction is a fresh start, free from the baggage of someone else’s past.
However, one major consideration for many prospective homeowners is the rising cost of purchasing a new home. In the past year alone, the soaring costs of materials increased the average price of new home constructions by around $36K. With this in mind, many homeowners hesitate to embark on the construction process.
Why Are New Homes So Expensive?
For starters, the cost of raw building materials has skyrocketed in recent years, increasing the overall cost of a home’s construction. Prices of copper, lumber, and drywall—as well as a number of other materials—continue to fluctuate widely in the wake of the pandemic and supply chain backups, leading to record high prices.
In particular, lumber has climbed steeply in price, leaving many contractors and construction companies at a loss as to how to cope. Adding to their concerns, the low supplies of building materials can impact and prolong the construction schedule of a new home, especially if the needed materials are not available.
Aside from the rising cost of materials, the number of existing homes available on the market has also gone down in recent years, forcing many prospective buyers to invest in new building projects. Both the increase in demand for materials and for existing homes has taken its toll on the market, leading to a surge in overall costs.
The Price of a New Construction
Given the recent fluctuations, it’s difficult to give an exact price for a newly built home. Of course, the cost of a new home can vary widely depending on its size, location, materials, and style. While we may not be able to give you an exact number, we can tell you that the price of materials has gone up by over 12% in the past year, according to the Bureau of Labor Statistics.
This is not only a recent trend but one that has continued since 2020, when prices rose suddenly by nearly 5%. Even with the gradual increase in overall costs, the market does fluctuate, especially when it comes to lumber prices. As more lumber companies try to meet the growing demand, prices may go down as they funnel more lumber into the market.
Aside from lumber, the price of other raw materials also continues to climb steadily. Because of this, the price of materials may also change during the course of a construction project, leading to greater costs as the work progresses. These variables make it challenging to provide a definitive estimate of costs for new constructions. However, we can tell you that the price is only likely to increase going forward.
Should You Buy a Newly Constructed Home?
Despite the recent price hikes, purchasing a new construction is still an attractive option for many new homebuyers looking to settle down. This is a personal decision and one worth taking the time to consider fully. There are still many reasons that make purchasing a new construction worthwhile.
● You can design the layout of your home to accommodate your present and future needs.
● New homes are built to last with durable, state-of-the-art materials and efficient construction technologies.
● Compared to older homes, new constructions are more environmentally friendly and energy efficient, saving you money in the long run.
● While it may be tempting to fix up an old property, the rising cost of construction materials is still affecting major renovation projects.
● Experts predict that the price of building materials will increase in the near future.
● Interest rates are currently low, helping to offset the high cost of materials.
Given these considerations, it may be a good time for you to invest in a new construction. Whether or not you decide to invest in a property will largely depend on your budget and personal finances. Learning more about the financing options available to you will also help you determine if a new home is within your reach.
Want to Learn More About New Constructions in Eugene, Oregon?
At Schar Construction, Inc., our experienced contractors are on hand to answer all your questions. As a local company with deep roots in Oregon, we understand what it takes to build homes in the Eugene area.
From explaining the price of materials to guiding you through the inspection process, our experts can help you take the first step towards building your new home. Call today for a free consultation with us at Schar Construction, Inc., at 541-204-8406.