U.S. Homebuilders Struggle with Higher Material Costs

Atlanta–Rising oil prices are increasing the cost of necessary construction materials, adding to U.S. homebuilders’ problems, the International Herald Tribune reports.Prices for steel, aluminum, concrete, copper, asphalt, plumbing fixtures and brick, along with other materials, have gone up. The wholesale new home construction materials cost increased 3.4 percent in April compared to April 2007, the Labor Department said.”Any material that is petroleum-based or transportation-intensive will have pricing pressure during periods of rising oil prices,” said Tony Callahan, senior vice president of Purchasing, Planning & Design for Atlanta-based Beazer Homes USA Inc. “Manufacturers are trying to push cost increases through for materials like asphalt roof shingles, carpet, insulation.”Homebuyers currently are facing 40 percent buyer cancellation rates and massive land losses in the ongoing housing slump.Asphalt and siding have seen the largest percentage jump in costs due to increasing oil prices. Asphalt rose nearly 26 percent in April as diesel fuel–needed for trucks and heavy machinery at construction sites–rose roughly 66 percent.