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New homes demand is high in Michigan. So are builder costs — and prices (Bridge Michigan)

April 6, 2022

New homes demand is high in Michigan. So are builder costs — and prices (Bridge Michigan)

Scott Schwanke opened an email on Thursday containing yet another curveball that the state director of M/I Homes will have to field as the company plans to build up to 400 new houses in southeast Michigan this year.

He already easily lists how construction financials are changing: Lumber costs hit a record high in 2021, affecting costs of framing, flooring and cabinets. Fuel costs are increasing for deliveries. Appliances still take months longer to receive as manufacturers continue to grapple with a global chip shortage to direct the electronic elements in everything from refrigerators to clothes dryers.

And then the email: As wood prices seemed to be headed down for the building season, Schwanke learned a major Canadian sawmill plans a four-week shut down, saying it needed to catch up to its own supply chain problems. 

Forget reports that cost pressures are waning, Schwanke said. “Our April lumber prices are going up.”

The home building industry in Michigan is entering the second quarter of 2021 expecting the spring to launch a wave of buyer demand, due in part to the record low numbers of existing homes listed for sale.

 However, builders and their suppliers — after already navigating a pandemic and shortages of everything from plywood boards to labor — also say that volatility in their industry hasn’t ended. They’re facing still more pricing pressures, hiring shortages and market uncertainty, even as they brace for what they say should be a busy season. 

The combination is just “weird,” said Darian Neubecker, vice president at Robertson Brothers Homes in Bloomfield Hills. “There’s no other way to say it.”

Click here to read the full article: https://www.bridgemi.com/business-watch/new-homes-demand-high-michigan-so-are-builder-costs-and-prices

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