Higher costs pinch home buyers
(CNN) — As house prices and rents soar, Americans are struggling to keep up with the cost of living.
Many resort to places they can fix themselves, only to find that this option can be just as expensive.
“It was nothing because I was expecting to buy my first house,” said Allison Braun, who bought her first home in February.
After losing bidding wars and paying $75,000 over her budget, she opted for a repairman, hoping to save some money.
“It was really surprising to come here and fix things. Overwhelming is another way to explain it,” Braun said.
Rents have risen by a record 17% over the past year, with house prices up nearly 20%. Construction costs too.
Braun, who works for real estate company Redfin, is redoing nearly every space in her home.
The kitchen needed new counters.
“We were really surprised at the cost, especially the labor, to install them,” Braun said. “We wanted to find a way to make our counters ourselves. Thus were born the concrete counters.
She saved $3,300 doing them with her partner.
She tried the same with her floors, but underestimated the amount she would need and the rapidly rising cost of wood.
“We didn’t estimate enough wood for the first floor and went back to buy more wood for the floor. And it turned out that after a month, the flooring went up about 25 cents per square foot,” she said.
But it’s not just homeowners who are stuck with higher costs. Building materials are up 24% over the past year.
Bill McGrath’s company installs elevators in a residential complex in New Jersey. So far they have two.
“Well, here you have the electronics, which is stainless steel. The plastics, the electronic boards behind it are expensive and more. The ceilings, the wood, you’re standing on wood. There’s steel underneath,” he said.
And it all goes up.
Supply chain slowdowns and demand have driven up construction costs, forcing projects to run over budget and on schedule.
A third elevator “will cost 17% more in materials than the other two we have completed”. said McGrath.
And he said his 18-person company was spending more on gas to move materials, 24% over the past month.
All of these rising costs have to be passed on in some way. “I guess (for) the people who will be living here,” McGrath said.
For Braun, the higher costs mean certain things, like painting the exterior of the house, are put on hold.
“We would love to hire someone to do that. It’s been put on the back burner now, and we’re just going to have to learn to love green,” Braun said.
In other economic news, analysts said U.S. inflation hit a 40-year high, while consumer confidence fell to a low not seen since August 2011.
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