Prices of building materials rise with oil prices

The wholesale cost of building materials for new home construction increased 3.4 percent overall in April compared with a year earlier, according to the News-Leader.

Prices have increased for materials such as steel, aluminum, concrete and copper, and prices for oil-related materials, such as asphalt have shown the biggest percentage increase as a result of rising oil prices. In April, asphalt prices had increased almost 26 percent compared with a year ago and diesel fuel prices had jumped about 66 percent.

And though the prices of materials such as lumber and drywall have decreased, transportation costs are eating up those price drops.

"Lumber is actually less than it has been for years, but you're not seeing all of that because transportation is so much more," says Tom Sutherland of Sutherland Lumber Co., Kansas City, Mo. "Everything has a freight surcharge on it. That's probably affecting our cost as much as anything.

"I don't think we’ve begun to see the inflation we're going to see if oil continues to go up," he continues. "A lot of these manufacturers have been eating the costs, and that's not going to last forever."

In the meantime, some home builders are trying to alleviate the pressure by using more local materials, building smaller houses and using less expensive materials.

Date : 6/27/2008