The Cost of Building Materials is Costly for Alaska Builders


Alaska and the rest of the country’s housing market are hot. Homebuilders are predicted to break ground on 1.7 million new homes this year, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

Most sellers are fielding multiple offers immediately and buyers are taking advantage of low-interest rates. This flurry of activity has the homebuilding industry fueling the post-pandemic economy. But unfortunately, supply isn’t prepared for this sharp increase in demand. 

Over the past year, the price of building materials has gone through the roof. A lot of contributing factors collided to create the problem. Low-interest rates created a massive housing demand. But then in addition to this sharp demand, there quickly became a severe shortage of supplies. Manufacturing plants shutdowns because of the pandemic and weather events. This led to fewer building supplies on the market. This led to increased prices, and it's now become a major headache for homeowners and homebuilders.  

Homebuilders, like us, are having to delay projects because some materials simply aren’t available. For example, some soundproof insulations like ROCKWOOL and spray foam insulations are nearly impossible to find. One Alaska insulation installer told us it takes four months to get ROCKWOOL and open cell spray foam isn’t available anywhere. 

But it’s the price and availability of lumber that has everyone talking. The price of lumber is up 377% from last year, according to the National Association of Home Builders. Unfortunately, there’s nothing we can do about these increased costs. Like every other homebuilder across the country, we’re having to purchase lumber and other supplies at these high rates to complete homes. So, we’ve had to update the prices on our new construction homes to reflect these increased costs.

We understand this is frustrating for people wanting to take advantage of low-interest rates or upgrade to the home of their dreams. We’re working with the Anchorage Home Builders Association and NAHB, which are asking the Biden administration for a temporary pause on Canadian lumber tariffs. This would temporarily lower prices and increase supply.

In the meantime, we ask that you, our buyers, please bear with us as the prices of building materials fluctuate. To help prevent further delays we ask that you make your design decisions as quickly as possible, with as few changes as possible.