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Rising mortgage rates aren’t the housing market’s only challenge. Higher prices for building materials are driving up construction costs and straining renovation budgets, The Wall Street Journal reports.
A boom in data center construction and disruptions at the world’s second-largest copper mine have pushed copper prices to record levels. Lumber prices have also climbed because of import taxes and sawmill closures. Meanwhile, the war in Iran has disrupted fuel and chemical markets, increasing costs for resins and plastics as well as transportation expenses for materials such as wallboard and cement.
Together, the rising input costs are worsening affordability challenges that have already pushed homeownership out of reach for many Americans.
Concerns over renewed inflation are intensifying as conflict in Iran disrupts roughly 20% of the world’s oil supply, along with significant shares of natural gas, petrochemicals and aluminum production. A global bond market sell-off has also pushed borrowing costs higher, with the average rate on a 30-year fixed mortgage rising to 6.51% last week, its highest level since August.
The National Association of Home Builders said 70% of respondents in its April builder confidence survey reported difficulty pricing homes due to uncertainty surrounding material costs.
