Where Are Labor and Material Cost Affecting Housing Affordability?

Jun 26, 2024

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As the landscape of the housing market continues to evolve, one topic continues to remain at the forefront: affordability.

It’s a topic we frequently explore on this podcast because it touches every facet of the property market, including the rising costs of construction. With more people moving to more affordable regions, there’s a notable impact on both home prices and the costs associated with building new homes.

As inflation remains elevated, people are migrating to more affordable areas, and the construction industry is feeling the strain with a shortage of workers, causing affordability to erode.

Building a house involves numerous components — drywall, copper pipes, shingles, and more. Each of these materials, along with labor costs, plays a significant role in the overall price of construction. While the prices of materials have decreased since their peak during the pandemic, the overall cost of building remains a challenge due to labor shortages and other economic pressures.

To delve deeper into the dynamics between material and labor costs and affordability in the housing market, host Maiclaire Bolton Smith is joined by Jay Thies, associate vice president of Pricing Analysis and Delivery at CoreLogic.

In This Episode:

2:30 – What has changed in recent months in terms of construction and labor prices?

5:59 – How will declining material costs influence new construction trends?

7:45 – Erika Stanley goes over the numbers in the housing market in The Sip.

9:24 – There is increasing interest in the construction trades. How will this affect the property market long-term?

12:11 – How are natural catastrophes affecting labor and material costs?

13:31 – Is there a correlation between population migration patterns and the price of labor and materials?

16:29 – In which markets are construction prices cooling off?

17:24 – Crystal Ball: What does the future of labor and material costs look like?

19:35 – Erika Stanley reviews natural catastrophes and extreme weather events across the world.

Up Next: Is There Actually a Lumber Shortage?

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