Dec 08, 2021

Interactive: What's driving the higher prices of new homes?

Hat tip to Jessica for sharing this interactive.

Home prices in many markets have rocketed skyward during the pandemic. While many note the supply/demand imbalances that have been driving prices, there's another factor at work here. Namely, the costs of construction materials for new homes have seen significant increases which get passed along to the buyers in the form of higher prices. 

In this interactive from Bloomberg, students will be able to see recent price changes in the various components of a home (e.g., foundation, trusses, drywall): 

Questions: 

  • Which building materials had the largest increase (in dollars)? What led to this increase? 
  • At what point do you think builders will not be able to pass along these costs to home buyers? 
  • These price increases on building materials impacted the prices of new homes. What impact do you think these increases might have on sales of existing home (as compared to new homes)? 

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You can find more interactives to engage your students in the NGPF Interactive Library. 

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 Here's an EdPuzzle video to explain mortgages. 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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