The Unprecedented Situation of the American Builder

Like any business, supply and demand reign over the housing industry and particularly in new construction. While the sellers of previously lived in homes have the simple luxury of naming their price, builders must constantly compare the contract price against the market price for materials.

COVID-19 saw most factories shut down, only to reopen at a limited pace in order to provide a safe work environment, causing a massive slowdown in supply. On the flip side, the stay-at-home mandates, combined with record low interest rates, led to a home-buying boom, putting massive strain on the flow of supplies.

The rising costs of lumber and other construction materials have increased so drastically, builders are having to adjust base prices at a rapid pace in order to keep up with the cost of building a home in today’s market.

“What we’re seeing right now is very unique: we have a huge demand for homes, be it resale or new, and we don’t have enough of them,” said Tamra Wade Team Founder Tamra Wade said. “The challenge for builders is how to sell a house at today’s price and build it at tomorrow’s price, and still be able to make a profit for their business.”

Rising Costs of Lumber

“It is difficult to come up with adjectives to describe what is happening in the lumber market. The price of lumber skyrocketed again last week regardless of species, product group, or grade. Contract Lumber’s Commodity Index surged by over $90 (8.3%) to reach higher into the stratosphere. At its current level of $1,174, our index has increased by over 42% since January 1st, and 280% since this week last year. For perspective, gas would be over $10 per gallon had it experienced that type of spike,” Patrick Smith of Contract Lumber said.

Supply Shock

Overall, in our industry, there is a lack of knowledge and education, and many buyers come to the contract table unarmed with all the facts. A diligent buyer’s agent has never been more important in preparing clients for this low inventory market, but especially, the unprecedented situation of today’s American builder.

For builders, incorporating this education has now become a vital part of their sales process. In conclusion, regardless of new construction or resale, buyers need to arm themselves with as much information as possible before embarking on their home buying journey.

Home Building Industry Market

For more information on The Tamra Wade Team of RE/MAX TRU, visit or read more on Atlanta Real Estate Forum here.

About Tamra Wade Team of RE/MAX TRU

The RE/MAX TRU – Tamra Wade Team is an ensemble of Atlanta’s finest new home sales professionals, servicing clients throughout North and South Metro Atlanta. The team represents such builders as Home South Communities by Lennar, Southern Heritage Homes, Stephen Elliott Homes, Tipton Homebuilders, and Expo Homes to name a few. With new home communities in Cobb, Fulton, Forsyth, Gwinnett and Hall Counties, as well as experience in resale homes, the Tamra Wade Team is the go-to company for buying and selling new homes in Atlanta.

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