The COVID-19 pandemic has affected virtually every area of the economy, upending supply chains and prompting a surge in demand for many products and services — who can forget the national toilet paper shortage of 2020 that forced countless households to “get creative” until manufacturers could restock the shelves?
While early toilet paper scarcity was mostly a result of panic buying and hoarding, other market disruptions were driven by entirely different sets of factors: used cars became more expensive and harder to find because fewer people traded old models for new ones; bikes vanished from stores when many people decided to take up cycling during lockdown.
The pandemic has also affected many key aspects of home renovation and construction, from material availability and arrival to project scheduling and pricing. Let’s explore how floundering supply chains and sky-high demand are making it more expensive to remodel your home this spring — and for the foreseeable future.
A Perfect Storm
The global pandemic has redefined business as usual for construction companies and home remodeling pros across the country, creating a perfect storm of sorts: unprecedented demand and a struggling supply chain that can’t, for the time being, keep up with that demand.
High consumer demand
This “perfect storm” started brewing last spring when mandatory lockdowns kept Americans home around the clock. Spending endless days at home caused many people to reevaluate their living spaces, prompting a major boom in the home improvement and remodeling sector that’s still going strong today.
Halted production lines
Ironically, the very lockdown that gave people the time and drive to finally start tackling minor repairs and major renovation projects also caused lumber mills and other material suppliers to halt production, at least temporarily.
Plummeting inventories
Insatiable demand combined with stalled production lines caused lumber and other material inventories to plummet. This basic supply-demand problem has been further intensified by a housing boom that’s recorded the highest level of new home starts since 2006.
No End in Sight… For Now
Construction material prices have been rising since the start of the pandemic — design-build firms across the country saw about a 20% increase in material costs from the start of 2020 to the start of 2021.
While lumber mills and other material suppliers are back in full swing (U.S. wood production actually hit a 13-year high in March), limited production capacity and sporadic labor shortages have made it very difficult for supply to catch up with such a robust demand.
Unfortunately, as suppliers struggle to meet demand and homebuilders and renovation pros scramble to source materials for summer projects they already have on the books, prices are continuing to rise.
Lumber prices have skyrocketed by 280% since the start of the pandemic, and experts predict that prices will remain elevated for the foreseeable future. They also predict that it will take at least 18 months for the material supply chain to align with demand.
For prices to correct sooner, demand would have to cool. That’s not likely to occur, however, as the lengthy — and historically busy — home building and remodeling season is just getting started.
Renovation Cost Control
No one wants to find out that the kitchen renovation they priced out in the spring will cost 20% more when it’s time to start the project in the summer. The best way to avoid this scenario and keep renovation costs within budget is by hiring a reputable design-build firm from day one.
At Hogan Design & Construction, we manage every project — from concept to completion — with open, honest communication and total transparency. Even in a price-boosting pandemic, we strive to provide accurate cost estimates throughout the design process, and a fixed-price contract before construction begins.
Newly updated for 2021, our free pricing guides can help you get an idea of what various renovation projects are costing this year — from kitchen, bathroom, and basement projects to whole-house construction and additions.
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