Being stuck in our homes the past year-plus has given many of us the renovation bug, but now may not be the time to take on large home improvement projects. COVID and quarantines have led to massive supply line disruptions, manufacturing delays, and labor shortages — a perfect storm causing building costs to skyrocket.
According to the National Association of Home Builders, the cost of building materials has increased an average of 26.1% in the last year. Lumber prices, in particular, have more than doubled since December 2020, and luxury materials like marble have also risen noticeably in price in the past months.
Even if you can afford the higher material prices, there’s no guarantee you’ll find what you need. Everything from vinyl and resin to household appliances have become harder to acquire, with 90% of builders reporting shortages of basic supplies.
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Budget more for basics, and save to avoid larger loans
What does this mean for homeowners? If you’re looking to do household repairs or renovations, you need to significantly boost your building budget. You should plan to spend way more on materials, and those shortages also mean delays could stretch out building costs in other ways.
For example, a kitchen remodel that may have taken six to eight weeks a year ago could now take twice as long while your builder deals with labor shortages and tries to get the appliances you need. This means more time-related costs for your builder — and for you. After all, the longer your kitchen is out of commission, the longer you need to order in food or find alternative ways to get your morning coffee fix.
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Larger renovation budgets also tend to mean large renovation loans. While interest and refinance rates are remarkably low right now, it’s not exactly a prime time to take on more debt than you planned to. Additionally, lenders are still hesitant to extend excess credit in an uncertain economy, so it may be harder to get a personal loan.
Instead of planning for a large loan, focus on saving to finance as much of your home renovation as possible yourself. This minimizes your loan needs, which keeps interest costs down. You’re also usually more likely to be approved for a small or modest-sized loan than a large one.
Keep and repair what you can
Appliances are one of the main categories seeing shortages, so that new refrigerator you had your eye on may not be an option any time soon. If possible, keep your appliances rather than buying new ones.
In some cases, this may mean you need to repair the appliances you have. If they’re still under warranty, contact the manufacturers. If not, find a local shop that can repair and spruce up your appliances.
Repairing your current appliances not only saves money you can put towards other materials — especially with costs still rising — it means putting money into your town’s economy by hiring locally. And repairing and upcycling also keeps those appliances out of landfills — a win-win-win.
Buy used when you need replacements
If you can’t manage with your current appliances for whatever reason, consider replacing them with gently used, new-to-you buys. A second-hand refrigerator or washing machine that’s only a couple of years old could still be quite an upgrade from your current machines, while still being budget- and shortage-friendly.
And, just as with new appliances, hiring local repair companies to give a used appliance new life is good for the economy and the environment. You can check area social media accounts and message boards to find everything from large appliances to small specialty machines, often at a steal. Research appliances before buying, and don’t be scared off by a good deal that may need some elbow grease.
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