Why have prices on material and labor been going upward? Let’s look at what happened during the past few years. When the housing boom crashed in the fall of 2008 it left many people and companies with little work to do. With the lack of equity and funding in place it left most homeowners with nothing else to do but stop building or remodeling. This caused many worker layoffs and builders filing for bankruptcy. In the end, there was little work to go around for those contractors that were left. To help stimulate their business, some companies lowered their prices.
Now fast forward to the last year and we are seeing an upswing in construction projects. We now have less people in the construction trades, creating a higher demand for work and thus resulting in more competition for those workers. Wages can only go up and someone has to pay for it.
Materials have seen price jumps in that amount of time. Many items like drywall have seen an increase of 60%. Everything from lumber, cabinets, paint, sheet metal, shingles, windows and more will see costs continue to rise. As demand goes up, so will prices.
Contractors have been working on such small profit margins for so long that many are increasing those numbers to hire more people and expand their business. I would suggest that if you are interested in building or remodeling, do it now before the next price increase.