As most people are aware now, the COVID-19 pandemic has taken its toll on prices in many industries. Rising labor prices, transportation costs, a hot residential real estate market, an increase in demand in the DIY market, and lockdowns in various parts of the world have all conspired to create a perfect storm of rising construction material costs. Industry experts expect that material costs will remain high but off their peak for the next 2-3 years driven primarily by mortgage rates.
As you consider a remodeling project here are a few considerations.
Short-term Delays MAY not result in lower COSTs
With expert projections that material prices remain high for the next 2-3 years, the inclination to delay a project due to these high costs will mean waiting years to see any cost reduction. While some may choose to delay, the overall cost is only one piece of most homeowners' remodeling decision process. The improvement to the overall quality of life is usually the primary consideration along with increasing your home's value and availability of the funds needed for the remodel.
Higher home values mean steady returns for remodeling projects
While getting a positive return on your home's value after a remodel is possible, it is much more likely that you are simply recouping some or most of the remodeling cost through increases in home value. Since home values have increased just as precipitously as material costs, the equation of the overall value versus the remodeling cost has remained relatively steady. This means that the higher remodeling costs can be offset by equally higher home values.
Higher Home value means easier financing despite higher costs
Additionally, higher home values mean that homeowners have found themselves with much more equity in their property than a year or two ago. This equity is a common source of funds for remodeling projects, and with mortgage rates remaining low, refinance offers are readily available.
So what may at first seem like a bad time to begin a remodeling project due to rising material costs, for many becomes an opportune time to take advantage of the higher home values while they last. You may be able to improve your family's quality of life now instead of waiting 2-3 years for materials and possibly home values to return to lower levels.