A rammed earth home in the middle of construction

The skyrocketing cost of lumber has many custom home builders struggling to keep prices down or even holding back construction. Inventory is low across the country. Homes are snatched up as soon as they hit the market, leaving many prospective and hungry home buyers unsure of how to proceed. So what options do you have if you’re looking for a home in this unprecedented climate? 

You can look for alternative materials — like rammed earth— that provide you with more bang for your buck!

Let’s take a closer look. 

The Rising Cost of Lumber and Other Home Building Materials in 2021 

In more ways than one, the housing market tends to mirror movements and trends in the supply chains, culture, and overall economy. A home reflects the lifestyle, values, and priorities of modern homeowners. And there has been a lot of hustle and bustle lately in real estate — especially since the start of the pandemic when interest rates dropped to record lows and demand for homes shot sky-high. So as homes flew off the market, buyers searched for ways to take advantage of the low-interest rates, but low inventory and disrupted supply chains have impacted people’s ability to do so.

Lumber Prices Rise to Unprecedented Highs

One hot topic making the rounds in real estate and homebuilder circles — as well as among consumers and homebuyers — is the lumber shortage and its exorbitant prices. According to various sources, the cost of building a home in 2021 has risen by an average of $24,o00 and this trend is largely a result of rising lumber prices. 

Business Insider reported the following:

  • Lumber costs rose up to 200% in the past year
  • Homebuilders have had to adjust their prices, passing them on to the consumer

What Caused the Lumber Cost Spike? 

The rise in lumber costs did not occur overnight. It has been a slow working trend for at least a decade. The National Association of Home Builders reported a 30% rise in lumber after Hurricane Harvey in 2017. That year, the price of the material was already at an all-time high. In April of 2020, some reports said lumber prices went up by 130%, which has consequently caused the price of single-family homes to rise as well. 

Factors that have had an impact on the rising prices include:

  • Tariffs imposed in previous administrations
  • Renegotiating of NAFTA in 2017
  • Higher U.S. import duties on Canadian lumber
  • Chaos in the market as a result of the COVID-19 pandemic
  • A drove of DIYers and Weekend Warriors stuck at home searching for lumber for home projects and remodels
  • Disruptions to production during the height of the pandemic 
  • And foresting restrictions over the years

When the country was in full panic mode, many industries had to shut down due to safety concerns. Lumber mills were no exception, and they did close their doors temporarily, which worsened the situation as demand increased.

How Much Lumber Does a Typical Home Need?

Homes today are built with interior wood framing. They are often referred to as “stick-built” because the pieces of wood are thin and relatively narrow. 

Home-building wood comes in four basic types that include framing studs, sheathing, plates, and headers. An average single-family dwelling of about 2,000 square feet — depending on the style — could typically expect lumber to compose about ⅓ of the costs of all materials. 

A home this size will use about: 

  • 16,000 board feet of lumber
  • 6,000 square feet of structural panels

History indicates that as traditional options run out, people will search out other options or alternatives. Using different and innovative materials can help offset this increased cost. 

The Law of Supply and Demand — The Quest for Wood

The concept of supply and demand is nothing new. It’s the universal law of economics that drives economic growth and innovation in all industries. Because interest rates remain low for now, there is still enough interest in home buying, which is keeping demand high. The question is, what will happen when things stabilize and prices adjust but people have forked over thousands more on homes that may not recuperate that value? 

What is the Future Forecast for Custom Home Prices and Home-Building Materials?

Experts are watching the trends closely. The pandemic has now begun to turn a corner and industries are returning to some normalcy. Yet, it is still uncertain when lumber prices might finally take a break from their relentless climb. People are finding themselves paying a mark-up price for a material that will not hold the same value in a few years. 

Rammed Earth: The Alternative Material That Offers Timeless Benefits 

One of the benefits of living in the Southwestern United States is that the climate is such that it allows for different types of building materials. And yet rammed earth is not a new invention. It has been around for thousands of years, thereby proving its longevity and resilience. It can be seen in such structures as the famous Alhambra castle in Spain, which still stands today. 

Rammed earth has inherent value because it is:

  • Energy efficient
  • Environmentally friendly 
  • Low maintenance

While a rammed earth home might still use some lumber and other various wooden materials, it offers an entirely different panorama of benefits that have captured the attention of home buyers looking for an alternative and a new form of custom home building.

For Your Custom Home, Find a Material That Never Stops Giving 

Villa Custom Homes has been the leading rammed earth custom home builder in the region for decades. We build homes all across New Mexico and the Las Cruces area. Not only has the rammed earth material gained popularity because it offers a gorgeous and earthy feel, but it also provides natural energy efficiency, reliability, and beauty.

Find the right alternative without sacrificing your vision of a dream home. Contact Villa Custom Homes today and learn what’s possible with rammed earth.