Interest Rates & Building Material Prices

[Carroll Courtney]

I am so close to retirement I can taste it. What is keeping me from retiring is my shop tools, yes tools. I have spent almost a life time collecting just about all old American made wwing machines so I am not going to leave them behind. Problem is the high cost of building materials, which I have purchase some of the framing and have them in storage in my present garage. Example of big ticket items is wall sheathing, if I go with Zip I need 90 sheets at 25.00 each. Zip 5/8 decking is 42.00 sheet which I need about 90 sheets. My retirement place is small living space with attach garage, nothing fancy just right for 2 people. Now the shocker is roof trusses, I need 35 trusses 5/12 pitch for 32' span plus 3' overhang on both sides. Which came in little over 300.00 each. With taxes plus delivery that came to a total of over 11,000.00 dollars. I had no idea that from walls up would cost so much, not counting roof metal of shingles. So basically this is what kinda has me on hold, we did take out loan to build this but I don't want to use anymore than what I have to. Do I build now at todays prices and then retire when dried in or?
What I was told by someone who is saying that with interest rates are going to go up to kinda slow down the economy. Once it slows down then bldg material prices will start to drop, so he is saying for me to try wait till January or so. I really don't want to wait any longer but, I don't want to pay 11,000.00 for trusses either if I can get them cheaper say in December or January. What is ya'll opinion, will material prices drop by end or beginning of the year?

[Jim Becker]

Many materials have fallen in cost considerably in recent months, but some forms of sheet goods are not falling as fast as others. FED action on interest rates could certainly affect demand but that's not the only factor at play here.

Honestly, one reason I went with a post frame structure for my new shop was to avoid the high cost of sheathing, etc. I'm still spending money on things that remain high...my electrical service install was $1800 more than the original quote because of material costs being high, but the 2x4s I used to do my interior horizontal girts were under four bucks each, at least half of what they got up to not all that long ago. Post frame uses half the trusses, too. And yes, you can use this form of construction for living quarters, too..."barndominium" projects are hot these days because of the cost advantages and the wall space to super insulate. They also go up uber fast.

[Zachary Hoyt]

I was pretty horrified by the price of trusses, and I like rafters better anyway, so they're what I used. Trusses are great for a company that has a crew and needs to go fast, but for the self-builder I don't see any advantages other than clear span, and they are more expensive, heavier to lift and leave less usable space under the roof.

[Tyler Bancroft]

I expect interest rates to keep going up through at least the first quarter next year. US inflation is around 8%, I believe, and it's higher in a lot of the Western world. Central banks are clamping down hard on it by jacking up rates, but things like the invasion of Ukraine and climate change are going to keep driving inflation higher through food and energy costs. I wouldn't want to bet on when central banks decide that enough is enough, but I do believe it won't be until recession kicks in. (In Canada, our inflation rate is currently around 7%, and we're probably going to be seeing another rate hike on Wednesday.) I think the big question is when building supply costs will start to drop once we hit recession – because profiteering has seemed to decouple price from demand a lot lately.

[Curt Harms]

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I think the big question is when building supply costs will start to drop once we hit recession – because profiteering has seemed to decouple price from demand a lot lately.

I haven't tracked building materials but was comparing prices in the grocery store. Most things have gone up but where store brands may have increased 10% - 15%, name brands for the same product are up 20% - 30% or more. I'd be surprised if it costs much more to make the name brand stuff than it does to make the store brand stuff so somebody's making out.

[Stan Calow]

Its a gamble, isn't it? The thing about assuming that prices will go down, is that as demand for some things drops, then manufacturers and suppliers dont necessarily keep production up, so the supply adjusts. Its a vicious cycle.

[Jim Becker]

Stan, that's kinda what happened in the lumber industry...manufacturing scaled back when the pandemic hit but demand skyrocketed because folks had time on their hands and money to spend because vacations were out of the question. So manufacturing wasn't there and then transportation also took a hit. So yea, it's a gamble. Things worked out for me ok for my project because the builder had a huge inventory of raw materials in place and costs came down before I started on the interior. But that was for wood. My electrical service install was $1800 higher than the quote from early in the summer purely due to material costs.