Gas prices in the United States have risen by approximately 120% since 2020. This rapid price increase has affected the, transportation, and manufacturing industries. Such fuel price inflation has also impacted the home improvement industry in several ways. This includes higher material production costs, material transportation costs, and contractor rates.
Gas Prices in the 2020s
Gas prices have followed an unusual trend since 2020. The demand for fuel and petroleum-based products initially decreased at the start of the pandemic, and this led to a short-term reduction in gas prices between March and April 2020.
Fuel producers began limiting production in the months that followed, leading to increased prices. The demand for fuel also gradually returned to its pre-pandemic levels as many industries resumed production. This led to a further increase in prices.
The recent Ukraine invasion pushed fuel prices to record highs, and these prices are unlikely to come down anytime soon. Due to this price increase, most industries have had to contend with higher production costs and slimmer profit margins. Ordinary consumers are also feeling the pinch and are cutting back on fuel-heavy activities such as road trips.
Gas Prices and the Home Improvement Industry
The home improvement industry has been hit hard by the recent surge in gas prices. This includes higher material production costs, material transportation costs, and contractor rates. Each of these factors have made it more difficult for homeowners to undertake home improvement projects.
Higher Material Production Costs
Many items used in home improvement projects, such as vinyl siding, PVC pipes, and plywood adhesives, are made from petroleum. The cost of producing these items has dramatically increased following the rise in fuel prices.
As a result, prospective homeowners who wish to undertake home improvement projects involving replacing wood flooring with vinyl or adding new plumbing systems with PVC pipes will need to pay a higher bill for material costs.
Higher Material Transportation Costs
Homeowners who do not intend to use petroleum-based products on an upcoming home improvement project will still need to contend with higher material transportation costs. These costs may be added to the price of different home improvement materials at hardware stores such as Home Depot and Lowes.
Alternatively, these prices may be factored in following the material’s purchase and transportation from a retailer. Homeowners who intend to purchase building materials from a retailer located far away will need to pay for higher fuel costs to bring these materials back to their residence from the seller’s location.
Higher Contractor Rates
The recent increase in gas prices has also caused many contractors to increase their rates. General inflation is one of the factors that have contributed to this. Contractors are forced to increase their charges to avoid losing real wages from increases in grocery and household item prices. Those who refuse to raise their rates aren’t likely to last long in this competitive industry, and may go bankrupt from sustained losses.
Some contractors also cite the rise in fuel costs as a direct reason for their rate increase. This factor is significant for contractors and workers that must travel a fair distance to the homeowner’s residence each day.
Gas Prices and the Real Estate Industry
Increased gas prices are also predicted to impact the real estate industry. Many experts believe the full effect of these prices has yet to be realized in the property market. One possible effect is that higher gas prices will lead to consumers having fewer savings, and this may reduce the demand for real estate. In turn, this may cause property sellers and landlords to lower their prices and rent.
Other real estate experts believe the rise in gas prices may increase real estate values in specific regions. For example, people may purchase homes in urban areas to minimize the need to travel great distances daily due to high fuel costs. This increased demand may raise real estate prices in urban areas.
How Long Will Gas Prices Impact the Home Improvement Industry?
The rise in gas prices will likely continue affecting the home improvement industry in the near future. These fuel prices may decrease by a small amount in the coming months. Still, many manufacturers and suppliers may keep their prices high to compensate for reduced profits during this challenging period.
This means it is unlikely that prices of petroleum-based home improvement supplies such as vinyl flooring, PVC pipes, or plywood adhesives will go down. However, homeowners may be able to save money on transport costs once fuel prices decrease.
Tips to Make Home Improvement Projects More Cost-Effective
Many homeowners are still undertaking home improvement projects despite the challenges that rising gas prices pose. Such individuals will need to bear higher project costs, but there are many ways to minimize these.
Purchasing Local Materials
Purchasing local materials is one of the best ways to minimize costs during a home improvement project. This strategy reduces the high transport costs associated with shipping building materials from suppliers to the homeowner’s property.
This strategy may be more suitable for individuals located in major cities with access to large hardware stores. However, homeowners can also contact independent suppliers in their city for building materials and supplies.
Performing Renovations Without a Contractor
Many homeowners opt to perform renovations themselves to save money. This route may be preferable for minor home improvement tasks such as painting or restoring hardwood floors.
Homeowners can also split duties with contractors to minimize the cost of hiring them for a project. For example, the homeowner can offer to acquire permits and allow the contractor to take care of labor-intensive tasks. This minimizes the amount of time the contractor spends on the project.
Opting for Non-Petroleum Based Building Materials
Many building materials such as vinyl flooring and PVC pipes are made from petroleum and will likely get more expensive as fuel prices continue increasing. Therefore, homeowners should opt for other types of building materials to save on costs.
PVC pipes are still much cheaper than stainless steel and copper pipes, but homeowners can opt for wooden floors as a substitute for vinyl.
Are Home Improvement Projects Still Worthwhile in 2022?
Rising fuel prices and limited disposable income may have discouraged some homeowners from undertaking home improvement projects. However, such projects can still be beneficial for numerous reasons. This includes:
Improving Property Resale Value
Many homeowners perform home improvement projects to boost their property’s resale value. This means the cost of a home improvement project can be viewed as an investment with a potentially high return. Some types of projects offer much better returns than others.
For example, refinishing hardwood floors offers a 147% return on investment. This is much more favorable than a bathroom renovation project which provides an average of 71% return on investment. This means performing specific home improvement projects on real estate investment properties in Annandale could be beneficial for homeowners.
Many homebuyers also seek out specific types of properties based on additions the original homeowner has added. For example, some buyers may look up homes for sale in Mount Vernon, VA, or houses for sale in Springfield, VA, with backyard decks during their search for a new home.
Keeping Your Property Exciting
Homeowners may also perform home improvement projects to give their existing property a new and exciting feel. The addition of a pool or a gazebo can encourage homeowners to rethink their decision to move. This may be a good strategy if they are seeking a new property at a time when Alexandria, VA, mortgage rates are unfavorable.
Finding the Right Property for Your Needs in 2022
Homeowners seeking to purchase a new property in Virginia can benefit from hiring Michael Galliot.
Michael Galliot understands the current housing market for Mount Vernon VA homes for sale in 2022. He can also guide prospective homeowners who wish to put up their property for sale in Virginia and help them sell their property for its true value. Please get in touch with us today for assistance with buying or selling a home.
