Oklahoma homebuyers will help pay for national recovery
Wallboard, plaster, lumber, plywood, insulation — prices for building materials are on the way up.
Behold the inevitable downside to the national housing recovery:
Higher prices for new homes — and not because of the kind of appreciation in value that we generally enjoy, but because of rising costs to build.
Robert Crout, president of the Central Oklahoma Home Builders Association, has been cautioning folks to get ready since he took office at the first of the year.
He and others from Oklahoma came back from the International Builders Show in Las Vegas in January glad to hear of recovery in much of the country, but freshly alerted to rising — in some cases, spiking — prices for the stuff that goes into building a house.
Last month, Crout said homebuilders here were feeling the squeeze because appraisers weren't factoring in the increased costs for materials. He said builders were absorbing increases, because lenders won't underwrite loans for more than an appraisal.
The spread will close eventually, and with home prices in the state forecast to rise 15 percent over the next three years just on the strengthening market, according to the National Association of Realtors, the increases are going to hit buyers sooner or later.
And now come some numbers to back up Crout's concerns, from the Associated General Contractors of America.
The AGC said the producer price index for construction materials jumped 1.3 percent between January and February, which was equal to the entire increase for 2012. The index was 2 percent higher than in February 2012, “outpacing the increase in the price contractors are able to charge for most types of new buildings,” he said.
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