Racine Sun

Rampant inflation has been one of the foremost concerns for Americans across the country in recent months. 

As goods and services continue to rise in price, one very notable area of the economy being impacted by inflation is home construction. In Racine-Kenosha, this issue hits close to home. 

The home supply is getting lower and lower as the price of lumber, one of the hardest hit materials by inflation, becomes scarce and harder to source. Reports show that the price of lumber increased by 300% this spring compared to last year. Lumber prices reached an all time high on May 28, costing $1,515 per thousand board feet. As a result, home values are rising rapidly as people scramble to close a deal. This has made housing costs rise across the board and stands today as one of the most extreme and clear examples of modern-day inflation in the U.S. 

Data released by the National Association of Home Builders (NAHB) reveals that 62% of home builders have increased their prices, 59% are pre-ordering materials and 20% have abandoned projects altogether due to inflated prices. NAHB data also shows that 60% of American households cannot afford the median price of a house, which is now $346,577. Racine County placed seventh with growth of 45.92% in value over the past five years.

According to the Washington Examiner, 88% of Americans believe inflation will continue to increase during President Joe Biden’s time in the White House, and 83% are concerned or very concerned about it. The Federal Reserve Bank of New York conducted a study that estimates the median inflation rate for the next 12 months at 4.8%, more than double what is considered to be a healthy inflation rate.

Democrat lawmakers have been pushing for another $6 trillion stimulus package that experts say will accelerate rising costs of daily necessities like groceries and fuel.

Some signs of inflation lessening have been seen including the Manheim Used Vehicle Value Index falling during the first 15 days of July. Nearly 605,000 jobs have been added monthly since Biden took office, with economic growth tracking above 7%.

Fed Chair Powell said on July 28 that "inflation has increased notably and will likely remain elevated in coming months before moderating." Supply bottlenecks put upward pressure on prices as the economy reopens and spending rebounds. He said the bottleneck effects were larger than expected, but inflation is expected to drop down toward the Fed's goals as supply problems abate.