The Challenge of Homebuilding in a Volatile Market
Running a home building business is incredibly tough, especially in a cyclical industry, when input costs are inherently unstable and subject to wide fluctuations.
Post-COVID Inflation and Its Impact on Materials
Most people are familiar with the inflationary pressures that followed COVID-19. Some attributed them to excessive stimulus during the pandemic, while the National Bureau of Economic Research identified rising commodity prices and supply chain disruptions as the primary drivers of inflation.
According to Trading Economics, lumber prices skyrocketed by an astonishing 538% between March 30, 2020, and May 3, 2021. In comparison, steel prices rose a more modest 61%, despite facing the same macroeconomic pressures. While steel offers numerous performance advantages, this pricing volatility played a key role in the shift toward steel for homebuilding during that period.
Lumber Prices Are Rising Again in 2024
Fast forward to 2024, and even without exogenous factors like a global pandemic, lumber prices are inexplicably on the rise once again. Year over year, lumber prices have increased 20%, but the real extent of the problem is even greater.
From July 15, 2024, to November 19, 2024, lumber prices skyrocketed 47%, according to Trading Economics. During the same period, steel prices remained stable, with only a 1% increase.
Why Steel is the Smarter Choice for Homebuilders
Fortunately, there is a better option for homebuilders looking to avoid the volatility of lumber: steel. With its consistent pricing, superior performance, and long-term reliability, steel provides a solution to the unpredictability of traditional materials like lumber.
Ready to Make the Switch to Steel Framing?
Discover the advantages of steel and stay ahead of the curve. Learn more at Scottsdale Steel Frames or call us at 1 (888) 406-2080 to get ahead!
