Lumber Cost On The Rise.

High Lumber Costs are about to Get Higher

If you’ve got your heart set on a new home, prepare to pay more (an average of $1,236 more according to an estimate from the National Association of Home Builders). The soaring lumber cost and widespread labor shortages are impacting the residential construction market. Lumber prices, already at record-high levels, are on their way up.

Lumber Cost On The Rise

Steadily Rising Costs

Random Lengths is a subscriber-based, independent organization that provides weekly reports on wood products pricing. According to the April 28 report, the cost of oriented strand board (OSB) lumber reached 4-year highs. OSB is used extensively in residential construction. The current FOB mill composite price (the price directly from the mill, without any added freight costs) is $426. This is up $68 from the same period last year.

The report also noted that the April 28, 2017 framing lumber cost (spruce, pine, fir) was up significantly from April 28, 2016. Analysts speculate that lumber prices jumped 22% during the first quarter of 2017 based on just the anticipation of a tariff on imported lumber. Now that the tariff is a reality, prices will continue to soar for the foreseeable future.

Trump Administration Cracks Down on Canadian Imports

Lumber imported into the United States from Canada accounts for about 30% of the softwood lumber used to build U.S. houses. On April 24, 2017, the Trump administration announced new tariffs averaging 20% on those imports. This new tariff will be collected retroactively 90 days prior to April 24th. These taxes will surely increase lumber costs and, consequently, housing costs.

Analysts, builders, and lumber suppliers on both sides of the border are coming to terms with this new reality. It’s too early to accurately predict how the tax will affect long term lumber prices. One thing is certain, though. Lumber prices for the foreseeable future will increase. As they do, builders will have little choice but to pass those increases on to consumers.

Now What?

The recent tariff increase should be a reality check for potential home-buyers who have been on the fence, hoping that prices of new inventory will decline. On the contrary, the reality is that lumber costs will likely increase in the near term. How much prices will increase and how long they’ll remain elevated should become clearer in the coming months. For now, though, the sooner home buyers lock in a price, the better.


Top 5 Manufactured Home Myths

Manufactured Home Myths BUSTED!

“Home sweet home” comes in all sizes, locations, and budgets: urban brownstones, modern high-rise apartments, suburban ranch homes, rustic farmhouses, manufactured homes … That’s right. A manufactured home is the perfect option for many. If that surprises you, you may be buying into the following common (false) manufactured home myths. So, let’s set the record straight!

Myth 1: Manufactured homes are unsafe.

Modern day (post-1994) manufactured homes must meet the same U.S. Department of Housing and Urban Development (HUD) safety standards as site built homes. That means manufactured homes meet the same construction quality, strength, and fire / wind-resistant requirements as site-built homes. In fact, manufactured homes must meet higher building-code standards than site-built homes.

Myth 2: The value of a manufactured home won’t appreciate.

As a blanket statement, that’s false. Like site-built homes, a rise or drop in value occurs on a home by home basis. Manufactured homes can drop in value, just like site built homes…but manufactured homes can also gain equity and increase in value! This is primarily true if:

  • The home’s owner also owns the land on which the home sits.
  • The house is well maintained.
  • The structure is attached to a foundation.
  • The home has been updated with additions or attached garages.

Also, location is important. Potential for a rise in home value increases with desirable land location.

Myth 3: Manufactured home communities are tacky.

It is true that you’ll find rundown “trailer parks” throughout the United States. You’ll also find rundown site-built-home subdivisions. But just as you’ll find exclusive gated communities with upscale homes, you’ll find luxurious manufactured home communities with resort-style pools, million-dollar views, and famous residents.

Myth 4: Manufactured homes all look the same.

Granite, hardwoods, gourmet kitchens with islands, fireplaces, soaking tubs, custom window treatments, spacious porches, media rooms, walk-in closets, skylights, master suites … manufactured homes have these amenities, and many more.

Myth 5: It’s tough to find financing for a manufactured home.

It’s no tougher to secure financing for a manufactured home than for a traditional home. When you finance a manufactured home as real property, VA, FHA, USDA and conventional financing is available with terms up to 30 years.

So, consider the benefits of manufactured homes. For significantly less money than you’d spend on a site-built home, you can purchase a manufactured home that has all of the amenities on your wish list. You just might get the home sweet home of your dreams.