Recovery Fuels Prices: Rising Cost of Building Materials, Land Could ...
An early spring surge in home building and buying after a long recession has touched off a round of price increases local builders say could endanger the still-fragile housing recovery.</br></br>Bethesda developer Bruce C. Winston said hikes of about 25 percent in drywall prices in recent months and of 15 percent in lumber since November have caused him ÛÏdeep concern that the recovery will be short-lived.</br></br>ÛÏThese are price increases [of a size] we havenÛªt seen in quite some time,Û said Winston, who is president of the Suburban Maryland Homebuilders Association. In a recent newsletter, he urged suppliers, subcontractors and builders to hold down prices.</br></br>An economist for the National Association of Homebuilders said that, in general, every 10 percent increase in the price of finished lumber adds one percent to the cost of a home. The association predicts that materials prices nationwide will rise from 5 to 10 percent during 1983, slightly ÛÏWeÛªre hopeful [the current price hikes] are a one-round increase. If not, vve can kiss the recovery goodbye,Û said economist Bob Sheehan.</br></br>Housing starts throughout the nation rose slightly last month, following a 33.4 percent leap in -January over December, the Commerce Department reported this week. While builders welcomed the news, the gain fueled some fears that low supplies of materials and a scattered labor force could bring on more price hikes.