If you think your home project is costing more than you had expected, don’t be surprised! With a labor shortage in the construction industry and major increases in the price of materials, your home project will cost a lot more than it would have last year.
One factor contributing to the spike in costs is the escalating fees for home services, with contractors and service providers like plumbers, electricians, and HVAC professionals increasing their prices. In addition, 46% of contractors and professionals say limited availability of building materials is their biggest concern lately. The material shortage has become a concern post-pandemic, with supply chain and import issues causing materials prices to rise by 31.3% between early 2020 and 2022. With limited availability comes increased demand, and increased demand always leads to higher prices.
While buying and renovating a home can seem like a daunting, high-budget affair, there are some ways to minimize expenses while still increasing the value of your home. Read on to find out how to cut costs without cutting quality, leading to a greater return on your home investment.
What is increasing the cost of renovations to your home?
The labor and materials shortage has massively impacted home construction and improvement costs.
According to the Bureau of Labor, inflation rates rose 7.9% for consumer items from 2021 to 2022, the most significant jump in 40 years. This rise has affected various categories across the construction and home improvement sectors. The Producer Price Index (PPI), a business cycle indicator that measures the gross change in the price of products, has climbed 10.6% within the first few months of 2022 for prices of goods used in residential construction.
Here’s a look at a few materials that have increased prices:
Increase in cost of construction materials
- Concrete: A durable and versatile material, concrete is generally used for footings, foundations, and paving. Cement and concrete has already seen a 3% increase between Q4 2021 and Q1 2022. These prices are expected to further climb 7.7% by the end of 2022. As a result, it now costs more to lay foundations or floors in your home. Some modern buildings or new construction may be able to use rammed earth as a replacement, reducing costs and labor requirements.
- Lumber: Softwood lumber prices have seen a tremendous spike in prices owing tosupply chain issues caused by the pandemic. The cost of lumber has jumped 79.5% from September 2021 to January 2022. Lumber is most often used for wall framing and paneling, making furniture, or in the flooring and ceiling, making it indispensable in the home. However, new alternatives to softwood lumber like wood composite, wood plastics, and cork can help you circumvent increasing lumber costs, with some options also making your home eco-friendly.
- Paint: Exterior and interior paint prices increased by 30.3% and 21.2%, respectively, causing even simple, DIY paint projects to cost more. A 300 - 400 square feet project typically requires 1 gallon, which, depending on quality, could now cost between $15-$50 dollars. With steadily increasing paint prices, you can look at alternatives like temporary wallpaper, wall decals, tiling, or tapestries to cut costs.
- Furnishings: The Bureau of Labor benchmarked the price increase of household furnishings and supplies at 10.6% between April 2021 and March 2022. You can try purchasing second-hand pieces wherever possible, take advantage of annual sales, and avoid impulse buys while decorating to save money when it comes to furnishings.
Increase in labor costs
Another factor driving up the prices for home projects is a shortage of labor. The vast majority of contractors have reported difficulty finding skilled labor in the last year. In recent research by The Farnsworth Group, 51% of residential contractors reported labor shortages in April 2022.
This problem is driven by the rising number of tradespeople entering retirement with not enough newcomers entering the field to take their places, resulting in a shrinking workforce. The average age of a skilled tradesman is 46, and these middle-aged professionals are quitting the services sector at alarming rates.
Resolving the labor shortage and skills gap will require drastic long-term measures from all industry agents, and possible investment from the government in job and skills training. Unfortunately, these factors indicate no respite for homebuyers any time soon.
However, there are still some simple steps you can take to help cut costs and save money while renovating a home.
How to cut costs on home projects
Some expenses are unavoidable but here are some ways you can make your project budget-friendly:
- DIY projects: With the services and materials scenario looking bleak, many homeowners and first-time buyers are turning to DIY projects. However, it is essential to research the skills required and take proper safety measures to ensure the success of your DIY project. Be honest about your abilities: don’t bite off more than you can chew just to end up with something worse than before. If you are just starting out, begin with more manageable tasks like painting door frames or smaller woodworking projects like a bedside table, and then move to larger projects, more technical projects like appliance installation or rewiring.
- Repurposing materials: Abide by the old adage “if it ain’t broke, don’t fix it.” Any fixtures or furnishings in good condition can be repurposed and reused in new projects- think doorknobs, wood from cabinets or doors, glass panels, and mirrors. Just a new paint color or varnish can transform something dated without needing total replacement. And if you don’t want to keep any fixtures for cosmetic reasons, try selling or trading them at your local flea market or online – another renovator or home restorer may treasure your trash.
- Enlist help when you really need it: Whether it’s a buddy with a nice toolkit, your cousin in the middle of carpentry training or a hired contractor, don’t be afraid to call on your network of friends, family and acquaintances to seek out their skills. Do-it-yourself doesn’t mean do it all by yourself. And remember: while it’s great to save money by performing renovations yourself, if you get in over your head and accidentally damage your home, you’ll end up seeking out a professional anyway (while probably paying them more to fix your mess).
While investing in a home, small efforts can help you stay within budget. An important step you must not skip before closing on your new home, let alone beginning the renovation, is a home inspection. An inspection is a visual examination of the home conducted by a qualified inspector. The inspection involves assessing the foundation, structure, and plumbing. The following section will explain the importance of getting a home inspection.
Why should you get a home inspection?
Buying a home is a large investment that continues to get more expensive. When it comes to buying a home, spending on the wrong one can be a costly mistake. With a home inspection, you are empowered to discover and find deficiencies with your potential home before you buy it. Here’s what a home inspection with Inspectify can do for you:
- Reveal quality and safety
A home inspection reveals information about the house structure and its conditions. A homeowner is then privy to information about what needs repair and whether the defects are minor or major. An inspection report reveals water damage, structural integrity, and conditions of the roof, electrical, and plumbing systems.
- Forecast future costs
Inspectify makes your life easier by creating an inspection report showing you the most pressing issues and providing free repair cost estimates for your house – a service most inspection companies charge extra to include.
- Act as a negotiation tool
Having the home inspector’s report in hand helps you negotiate costs with the seller. You can show the seller the faults with their house and let them know how much it is likely to cost you to repair them. This can help you negotiate with the seller and reduce your purchase price.
There are various ways you can use the information you receive from a home inspection:
- After receiving the home inspection report, you can choose to walk away from the purchase depending on how big or small the problems are. This is often the case when the estimated costs of repairs or renovations far outweigh estimated ROI.
- You can reduce the purchase price by negotiating based on the problems found in the inspection or gain cash credit to carry out the repairs yourself.
- You can plan and budget for the repairs if you decide they aren’t grievous enough to deter your purchase.
The Bottom Line
Most people often decide to buy a house based on its aesthetic appeal, location, and overall upkeep, overlooking many of the potential problems that it may have. A wrong decision can turn your dream home into a nightmare with endless plumbing problems, electrical system issues, and heating or cooling systems faults. In addition, the rising costs of materials and labor in the construction and home services industry make it imperative to have complete knowledge about your property before you invest. A home inspection gives you a clear picture of the condition of your home and helps you avoid a bad investment.
With Inspectify, you can book your inspection within a few minutes and connect with a nationwide network of over 1000 inspectors. So schedule an inspection today to care for the home you love!