2010 building trends

Now that we are into February, I figured it was time to provide a few insights for this year. These are based on what I am seeing and reading about in the home building industry.
• There were predictions that the demand for large homes was dead. I would define a large home as one above 4,000 square feet. I have seen several people coming in wanting to build a larger home, so the demand is returning, although at a slower rate.
• Lumber prices will increase. Lumber companies have shut down mills to help survive the downturn. Thus, there is less supply, and less production capacity. As the demand for lumber increases again, there will be a limited supply, which increases costs. We have already seen prices start to increase, and it will not get better in the short term.
• Interest rates will increase. The Feds are starting to wind down their support of the mortgage markets. Interest rates are expected to increase as they pull their involvement.
Hopefully these increases will not be rapid, but they are expected to be a factor in the costs of building and owning a home. So now is a good time to get going because it is past the bottom of the market.