The housing market has seen huge cost increases over the past several months. During the second quarter of 2022, things have started to slow down a bit, and even taper off in certain markets. New home builds took a dive in May and June, with fewer people breaking ground on new builds than in the first three months of the year. 

With the way things are going, it’s critical to keep your eye on the market if you’re looking to build a custom home. Below, you’ll find the latest data on residential construction materials and labor prices for Q2 2022. 

Residential Construction Materials Prices

As may be expected, custom home material prices have continued to rise through the second quarter of 2022. Still, they’re increasing at slower rates than they were during the first quarter, which may be a sign of hope for those waiting to build their custom home. Some prices have even gone down.

• Lumber: Lumber has slightly gone down in price. AFter a quick spike in May, it took a drastic dip downward and ended the quarter at about $650 per 1,000 board feet. (source)
• Steel:  Steel prices have steadily been going down since the beginning of Q2. (source)
• Paint: The cost of paint has only slightly risen, about 2%, during the second quarter of 2022. (source: BLS PPI Report) 
• Concrete: Concrete prices are up, too. Again, they’ve only risen slightly for quarter two, averaging a 3% increase from April to June. (source). 
• Glass: Glass prices haven’t changed much between Q1 and Q2 for this year. (BLS PPI)
• Gypsum: Gypsum, which is used in construction ? sound reduction, and leveling floors. (source)
• Plastics: Prices for plastics material and resins manufacturing slightly rose during 2022’s second quarter. (source)

Something else you might not factor into the cost of building your custom home is land. Often, land is the most costly part of building your home, and the price of it can vary depending on where it’s located and how easy it is to build on. In Prescott, there are a selection of fantastic plots available at fair prices. 

Residential Construction Labor Costs

Skilled laborers have been hard to come by since 2021, and that trend is driving prices up today. A short supply of labor is driving costs up, which is reflected in the overall cost of residential construction. Residential construction labor costs rose slightly from Q1 to Q2 this year, following several months of constant increase. 

The Economy

The economy this year has been confusing for many. Some claim that we’re entering a recession, while others say that we aren’t there yet. These differing opinions make sense. A labor shortage and rising prices point to the beginning of a recession. Meanwhile, the country’s GDP is higher than ever. Unemployment is low, too, and the U.S. added a record number of jobs in July. 

Regarding housing construction, the value of residential construction plateaued after a fast rise in the first quarter. The total number of private home construction projects has also decreased significantly between Q1 and Q2. 

Conclusion

The residential construction market has started to plateau through the second quarter of 2022. Prices do continue to rise, but they’re expected to do so at a much slower rate than in previous months. If you’ve been thinking about building a custom home in Prescott, now is the perfect time to take advantage of staggering prices to create your dream home. 

Call our office today at 928-776-0301 to discuss your project and check back here to get the latest numbers.