The price of the materials to build the frame of a 1,500-square-foot house used to cost less than $1,000.
Over the past two years, that price skyrocketed as high as $36,000, said Alan Risley, the construction supervisor at the nonprofit Crawford-Sebastian Community Development Council in Fort Smith.
It's not the only hurdle facing builders and buyers of new houses in Arkansas and nationwide. The same amount of shingles for a new roof costs $1,000 more than it used to, Risley said. New windows used to arrive two weeks after being ordered but they now take at least 13 weeks.
Interest rates for mortgage payments are also on the rise, Crawford-Sebastian Community Development Council executive director Marc Baker said.
"This is the worst scenario possible, interest rates going up and materials going up [at the same time], because usually one or the other is going to save you on your monthly payment," he said.
The prices of most construction products are driven by supply and demand, and prices increase when supply is low and demand is high, said Keith Wingfield, the president of River Rock Builders in Little Rock.
"Our builder confidence now is going way down, in terms of how the economic conditions are going to be for building," Wingfield said.
Additionally, gasoline prices have been higher than average for months, causing contractors to charge more for their travel, and some building and weatherization supplies are sparse on store shelves. These issues have been causing "heartache," both for low-to-moderate-income families hoping to become homeowners and for the agencies in Arkansas that help them achieve this milestone, Baker said.
The council's mission is "to improve the lives of low-income individuals and families" in the Fort Smith area, according to its website. Part of this effort includes building houses in Fort Smith with low monthly mortgage payments, but high building costs can drive up that monthly payment and price people out of the market, especially because contracts with hard budget ceilings are drawn up months in advance, Baker said.
"By the time the house is built, material costs are way higher than they were when [the owners] signed that contract," he said.
One way to avoid going over budget is to build a smaller floor plan, but that might not be livable for larger families, he said.
"If you've got five children and you want a four-bedroom home, you're going to have to squeeze into a three-bedroom now," Baker said.
The Crawford-Sebastian Community Development Council usually builds eight to 10 houses per year for low-income families, with qualifications varying based on household size. The maximum annual income for a qualifying family of four is $43,450, the council's rural housing manager Michael Fuchtman said.
The council also runs a weatherization program to protect houses from harsh temperatures and precipitation. This protection not only keeps the house in good structural condition but keeps homeowners' utility costs at a minimum, said Beverly Palmer, the weatherization program director at the Central Arkansas Development Council, a nonprofit agency assisting low-income Arkansans in 19 counties.
Weatherization includes applying caulk, insulating walls, placing weather strips under doors and installing smoke alarms and carbon monoxide detectors, Palmer said. Owners and renters of single-family homes and mobile homes qualify for the council's weatherization program if their annual income meets 200% of federal poverty guidelines. A one-person household would qualify with a maximum income of $27,180 per year.
The council's contractors try to buy materials at local hardware stores but have been finding shelves empty, Palmer said. Both high prices and low supply have a negative overall impact on weatherization efforts.
"[People] want to lower their energy consumption, and the longer it takes to do a job, the longer they're going to be using more fuel to heat or cool their home," Palmer said. "They'll continue to get high bills until we get that job completed."
Funded by federal grants, the Central Arkansas Development Council usually weatherizes 150 to 175 houses per year, but that number might decrease due to supply chain issues and depending on future funding amounts, Palmer said.
Building energy-efficient homes is a "solid investment" any new homeowner should make if they are able, said Wingfield, whose construction company builds homes with net zero energy costs.
"The whole idea is, you're not going to have a choice between your rent or mortgage payment and your utility bill," he said. "You're going to pay for your energy cost along with the house. It's just as much of a cost as owning the home."
Wingfield is a board member for the Arkansas Home Builders Association and the state's representative for the National Association of Home Builders. Earlier this month, the national organization released a statement in response to President Joe Biden's Housing Supply Action Plan, which aims "to ease the burden of housing costs over time by boosting the supply of quality housing in every community," according to the White House's May 16 news release.
The plan also includes reducing rental rates, and National Association of Home Builders chairman Jerry Konter said the plan "would help address a host of affordability challenges," according to a news release from the same day.
"We agree with the White House that the key to resolving our nation's housing affordability challenges is to build more homes," Konter said. "NAHB looks forward to working with the Biden administration and Congress to provide a comprehensive long-term solution to the affordability crisis that will enable builders to construct more affordable entry-level housing."
Meanwhile, demand for new houses regardless of owner income has "really come to a halt" because of the high material prices and interest rates, Wingfield said.
"In some cases, that will help the supply chain because it will reduce the pressure and demand for products," he said.