Louisville Real Estate News

Home builders are feeling the pinch from the rising cost of materials, energy, and interest.

Overall, building material prices rose by about 10 percent in 2005, according to the National Association of Home Builders. But the jump was much higher for products like PVC pipe and concrete, which are in demand as a result of the Gulf Coast hurricanes.

Builders who produce entry-level and moderately priced housing have been hit the hardest. “At the lower end under $175,000, we are not seeing as much ability to pass on those costs,” says David Brown of housing analyst Metrostudy Inc.

“There is an age-old misconception by the buying public who think that the home builders are making these enormous profits,” says Dallas-area builder Michael Mishler. “I’m here to tell you that’s not the case. The profits are very minimal and hard to increase.”