By Eric Douros
Owner and writer for
Utah Close Fast Cash Home Buyers
Responsible homeowners know that regular maintenance and repairs are necessary parts of homeownership. And If you’ve looked into home improvement projects recently, you’ve likely realized that prices are not what they used to be.
Let’s take a look at the factors contributing to the rising costs of home renovations and repairs.
Why are the costs for repairs going up?
- Labor shortages
Over the past few years, businesses across the country have struggled to remain full-staffed. The construction industry is no exception, as it is currently experiencing a shortage of 430,000 workers. The worker deficit has affected all parts of business, from delivery times and prices to additional pressure on an already highly sought-after service.
With more consumer demand than hands to do the job, wages have gone up, wait lists have gotten longer, and prices have soared. Homeowners should expect this trend to continue through 2022.
- Rising costs of raw materials
The National Association of Home Builders reported that building material prices jumped 20.4%, year-over-year, and have risen 31.3% since January 2020. These materials include steel products, lumber, paint, and other building materials.
The following chart shows the 2022 year-to-date changes in building-related price indices and the price movements since January 2020.
Source: NAHB
So on top of the rising labor costs, homeowners looking to work on that new renovation project assume the burden of growing materials costs.
- Housing market growth
As we all know, the US is experiencing a housing shortage. Across the country, as more people set out to build new homes, demand for supplies drives the cost of goods higher.
Utah, an epicenter for population and housing growth, has especially felt the effects of growing demand. In 2021 the housing shortage in the state dropped to 31,000 from around 56,000 in 2017 thanks to new construction units. As Utah’s popularity, job security, and wages ascend, so will the demand for new homes and the cost to build them.
- Oil prices
The events of 2022 crafted the perfect storm for oil prices to rise. Covid-19 restrictions have eased, and people feel more comfortable and eager to return to the world. They’re traveling and consuming more, which contributes to heightened demand. Secondly, Russia, one of the world’s top oil suppliers, has its hands tied with its invasion of Ukraine.
The rising cost of oil affects consumers in nearly every area of their lives, from the gas pump to their grocery bill and even renovation projects.
So what do oil prices have to do with rising costs of home repairs?
Oil is an essential element of home repairs. It is needed at all points in the process, from shipping construction materials to fueling equipment and for all petroleum-based products. So even if you plan to DIY your renovation projects to avoid high labor costs, you’ll still feel the blow of inflated prices.
Rising interest rates
In March of 2022, the Feds raised rates by 25 points — the first time they’ve done so since 2018. Since then, rates have gradually risen, and by the end of 2022, they are projected to hit a median target rate of 4.4%.
But what effect does rising interest rates have on homeowners wanting to renovate their houses? Aren’t they raising rates to combat inflated prices?
Yes, and in theory, raising the interest rates will calm inflation. But it also makes way for an opportune time to sell.
The thing is, by raising interest rates, the pool of borrowers who would qualify for mortgages gets smaller. Fewer prospective buyers mean the playing field tips back into balance and brings down the inflated housing prices we’ve seen over the past few years. The tightening of the market through rising interest rates means homeowners on the fence about selling need to consider what it might cost them to wait.
In the Salt Lake City housing market, one of the country’s fastest-growing and strongest housing markets, sellers now have a better time than ever to use the market to their advantage. Before interest rates cause the market to go down, sell now for more.
The bottom line: Now is the best time to sell in Salt Lake City, Utah
Recent inflation has impacted all areas of our lives, and the cost of home repairs and renovations is no exception. However, homeowners should know that investing large sums into repair efforts is not their only option.
Over the coming months, many industry experts expect rising interest rates and market shifts to cause home values to dip. If you’re considering selling, now is the time to take advantage of the high price points.
Utah Close Fast—Quick cash home buyers
NO REPAIRS NEEDED. WE BUY AS IS.
If you need to sell your house fast, consider working with a local cash home buyer.
At Utah Close Fast, we’re a father-son team of cash home buyers serving the Salt Lake City neighborhoods of Murray, Taylorsville, West Valley, and Cottonwood Height.
We understand that market is changing, and the cost to make repairs and maintain property upkeep can be overwhelming. So if you want to sell with NO REPAIRS and take advantage while the market is hot, we’re here to help you sell your house fast for cash.
Our Utah Close Fast promises:
- No hidden fees
- Close within 7 days
- No repairs or renovations
- Sell with tenants
- Fair cash offer
- Transparent family-owned business that wants to get you the highest possible profit
For more information on selling your house for cash fast, contact me today. Let’s chat about your goals for selling your home for cash.