The Hidden Truth Behind Your Construction Budget: What Contractors Don't Want You to Know
Download MP3Key Topics Covered:
- Construction cost increases beyond material prices - While home values and lumber costs grab headlines, there's much more driving up construction expenses
- Labor cost impact on projects - Labor can represent 20-50% of total construction costs, with increases of 10-20% adding tens of thousands to project budgets
- Building materials price surge - Association of Home Builders reports 15.9%, 21%, and 18.6% increases since December 2020, with expectations for continued growth in 2022
- HVAC system cost escalation - Air conditioning units and systems ($10-20K+ per project) seeing 15-30% price increases, potentially adding $10-15K to home costs
- Transportation and fuel costs - Rising fuel prices from $3 to $5-6 per gallon adding thousands in shipping costs for materials delivery
- Roofing material increases - GAF (major roofing manufacturer) implemented 6-8% price increases effective January 2022, adding $2-3K to typical roof projects
- Appliance inflation reality - Major appliances up 12% year-over-year, washers/dryers up 18%, with wholesale costs increasing over 10% annually
- Hidden price increases through reduced discounting - Elimination of promotional sales, mail-in rebates, and retailer competition means effective price increases exceed reported percentages
- Cascading effect on final home prices - $30-50K in cost increases can translate to $80-90K higher consumer prices due to builder markups
- Strategic timing advice - Get projects into the pipeline early to stay ahead of inflation curve and avoid budget overruns or project scope reductions
Bottom Line:
Multiple factors beyond raw material costs are driving unprecedented construction price increases, making early project planning and realistic budgeting more critical than ever.
Multiple factors beyond raw material costs are driving unprecedented construction price increases, making early project planning and realistic budgeting more critical than ever.
