By ANNIE MILLER BERND from Nerd Wallet
Timber costs skyrocketed last year, and potential home renovators are having to decide whether to wait in the price purgatory or go ahead and overpay.
David Logan, chief economist with the National Association of Home Builders, said sawmills falsely predicted that the housing market would collapse under the weight of a pandemic rather than a boom.
As Logan says, this “fatal mistake” has created a mismatch between supply and demand, and by May of this year, the cost of wood from sawmills will be four times higher than it was in April 2020, according to data from Fastmarkets Random Lengths. A specialist magazine for the wood-based panel industry.
By mid-July, timber prices had doubled to spring 2020 levels, according to Logan, but it is not yet clear whether the decline will continue and when it will hit homeowners.
Here are some tips for navigating home mods when the lumber cost is going through the roof.
Create a space for volatility
While the recent drop in prices may seem like a positive sign, Logan compares the home remodeling dilemma to the homebuyer dilemma.
“Trying to time the market can be more disturbing than making sure things are going,” he says.
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Logan says that when renovating, he’ll be doing major renovations, such as kitchen upgrades and room expansions.
If the project requires months of planning and waiting, the deal leaves room for price and schedule changes, says Ethan Landis, director of Landis Architects / Builders in Washington, DC. That way, if the price goes down before the contractor starts buying, you won’t get overpaid, but you can postpone them if the project is too expensive.
Look for alternatives, plan rarities
If a small handyman or a good update could wait months, Logan says he’s gambling and waiting for the wood to become more affordable.
“I am fully aware that the prices can then be high,” he says.
In the meantime, look for recycled, recycled, or alternative materials.
Ty Lindgren, a shift supervisor at Olympia, Wash., Food and beverage manufacturing shift supervisor brought wooden pallets left over from work to build a playhouse for children.
He estimates that using pallets instead of the expensive 2 × 4 reduced the cost of the project from $ 1,000 to about $ 100.
If you don’t have access to extra unclaimed wood, you can buy it.
Habitat for Human Recreation There are more than 900 locations, many of which sell recycled wood and wood items that can be turned into things like rehab and shelves. In some places you can search your inventory online.
Dallas-based interior designer Rebekah Hernandez says local wood and flooring liquidators may have enough wood to renew the flooring in a small room or floor of the house. ..
“I can’t be intimidating because I don’t have many options, but I have one,” she says.
If you postpone the project and wait for a lower price or save, small changes like new carpets, decorative pillows, and updated art may do for now, according to Hernandez.
“These are all subtle and small changes, but in the end they will help you feel happier and better in your room,” she says.
The costs for a renovation are always to be paid out of pocket. But only raise money for your project when you get low interest rates and affordable monthly payments, says Larry Pursing, a Chicago-based certified financial planner.
According to Persing, home equity credit lines are low-interest and usually available for 10 years. That means, with unpredictable costs and unpredictable schedules for a large project, you can borrow as much as you need, whenever you need it.
The FHA 203 (k) loan allows homebuyers to combine the cost of fixer uppers and home remodeling in one mortgage. Pershing recommends them to home buyers who do not yet have a lot of equity.
NS Home Improvement Loans Can provide project finance quickly and can often be pre-qualified to estimate monthly payments and interest costs.
Try a flat rate loan option like a personal loan and keep an eye on the final price. Once the price of wood goes up, you can’t go back and rent it.
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This article was made available to The Associated Press by the personal finance website Nerd Wallet. Annie Millerbernd is a writer for Nerd Wallet. Email: amillerbernd@nerdwallet.com ..
NerdWallet: How does a home renovation loan work? https://bit.ly/nerdwallet-improvement-loans
Habitat for Human Restoration https://www.habitat.org/restores
Copyright 2021 AP Communication. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed in any way without permission.
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