Increased costs strike Habitat
Mike Schmidt is a trim carpenter by trade, and a homebuilder by choice with his spare time. He's helped build about a dozen Habitat for Humanity homes in the city of Newton, and currently sits on the board of the organization.
Right now he spends every Saturday morning at a home under construction at 1409 N. Oak, a home that was framed up within the last two weeks. And it is a home that is proving to be more expensive to build this year than any other — the cost of materials has increased exponentially.
"Prices are up quite a bit," Schmidt said. "Prices are probably three or four times the price they were a year ago. Everything is a lot more expensive, and it changes daily."
This is house No. 17 for the organization. The organization uses donated labor from contractors, volunteer labor for as much of the construction of the home as possible and sells the home at cost with a no interest loan for a buyer who qualifies for the program under income guidelines.
There has been a strong demand for softwoods — – used for framing a house or building a deck — as supplies have tightened. Nationally housing starts hit their highest level since 2006 during the fall of 2020, fueling a strong demand for wood.
The last two weeks lumber future prices have backed off a bit — but the prices have remained at an increased level.
According to reporting by USA Today, softwood lumber was up 121% in April from a year earlier. According to the National Association of Home Buyers,overall costs for construction material in residential home have risen more 12% compared with last year,
According to Ken Hall, an insurance agent who serves on the Habitat for Humanity Board, the latest numbers he has received show lumber prices up 118 percent.
"Everything I hear is we will see some relief come fall," Hall said.
Rising softwood lumber prices over the past 12 months have added $35,872 to the price of an average new single-family home, and $12,966 to the market value of an average new multifamily home, according to the NAHB.
That price increase is holding true for the Habitat home currently under construction. Habitat targets a cost of materials of between $80,000 and $85,000 — and estimates of increased cost this year are as much as $10,000.
Hall said it is unlikely that the current home would stay in the targeted price range when it is complete — but the increased cost will not be passed on to the homeowner.
"We will keep the price the same for the homeowner, because they can't afford (the higher cost)," Schmidt said. "... We have a good organization and great community backing, some the best I have ever seen."
The organization changed what they are using for wall sheeting — the price increased to more than $40 per sheet. Roof sheeting increased to more than $60 a sheet.
"We have had people step up and help fill some of that void," Hall said. "... Kropf Lumber helped us out quite a bit. They froze pricing once they gave it to us. That took some of that out, otherwise it could have gotten more out of control. I would not want to be a developer right now trying to build houses."
Habitat has also turned to contractors and donors to find increased support from the community Schmidt said.
"We try and get more fundraising going on," Schmdit said. "I have asked some subcontractors who have donated in the past to the job if they can give a little more. They donate labor and cash too. ... We have to find more donors, that is about all we can do. ... We use basic materials anyway, so it is not like you can do a whole lot there."
At the job site things are kept pretty tidy — and spare unused is not left unattended.
"When prices were so high, I stayed overnight there when we had lumber dumped the night before, we just did not want to worry about it getting stolen," Schmidt said. "Kind of crazy."
There are other challenges as well — backordered items include carpet, appliances, paints and electronics.
The house framing was completed May 22, and volunteers will be working at the home 1409 N. Oak for the next few months to get it completed.
For more information and to follow the progress of the home build online, visit facebook.com/HarveyCountyHabitat. For more information about volunteering or donating, call 620-869-5124.