Raw material costs make house building an expensive venture

Moving into a pre-owned home may be more affordable than moving into or building a new one, according to the Los Angeles Times.

Although builders and contractors may be offering their services at discounted prices due to the recession, there is no sign that construction costs outside of labor will be coming down anytime soon. Reportedly, they have been consistently rising since the summer.

The prices for building materials have been steadily increasing year-over-year for the last few months, reaching a 4.5 percent increase during December 2010 over the same month the year before. Prices have been increasing steadily on a month-to-month basis, as well, the Times reported.

Many experts in the field have been watching the increases and noted that due to the rising prices, labor costs will have to increase eventually so builders can keep up.

"Builders are resisting raising their prices, but ultimately they're going to have to. Builders are not going to build at a loss," said Bernard Markstein, vice president of forecasting and analysis at the National Association of Home Builders.

The homebuilding industry is not the only sector being affected by the surge in prices for raw materials. Even some clothing retailers are having to increase the prices of their products to make up for the rising cost of cotton, according to an article in the Star Tribune.  

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