Economic disruption drives inflation up
Since the start of the pandemic, the U.S. economy has seen major disruption and the home construction industry faces even greater challenges. The production of goods, labor and supply chains have all been negatively impacted. In 2021, reconstruction costs rose as high as 22.8% over the preceding year. While inflation has started to slow in recent months, costs to rebuild a home are still outpacing pre-pandemic levels. Inflation occurs when demand exceeds supply and prices rise — that is still where we find ourselves today.
1. FRED: Producer Price Index by Industry: Building Material and Supplies Dealers
2. FRED: Employment Cost Index: Wages and Salaries: Private Industry Workers: Construction