Do you remember during the Covid-19 pandemic when there were rampant shortages off and on of different types of foods, dry goods, building supplies, baby formula, new cars and such? Did you dare travel during those years and find that gasoline, airfare and hotel prices were nuts? When it came to foodstuffs, manufacturers adjusted quickly by sometimes raising prices due to lack of ingredients and decreasing the size of the final product.  As an example, Snickers bars downsized form 50g to 44 g-equal to about one bite per bar but they kept prices the same. During the same time we heard how lumber and plywood nearly quadrupled in cost. Wholesale prices for plywood increased form $400 to $1500 per thousand square feet, with average retails prices that increased from $12.80 to $48.00 per sheet.

Well that pandemic is basically over and the supply chain has improved across the country. The National Assn. of Home Builders estimate that 9 out of 10 single-family homes built in the U.S. feature wood-framed walls, ceilings, floor sand roofs. The prices of new homes hasn’t dropped since those masked-up days even though lumber prices have fallen, but what has happened is that many builders around the country are doing the same thing as Snicker’s manufacturer (Mars, Inc.)…decreasing the size of new homes. On average, the Builders group has seen a 2% decrease in new home size across the country, it’s own form of ‘shrinkflation’.

The U.S. Census Bureau and HUD’s August housing report for the country found that housing permits were up 0.1% in June but are still 13% below last June’s numbers in 2022. Housing starts in July were up 3.9%. We aren’t as a nation keeping up with demand and statistics also point to a continuing lack of affordable housing being built to fulfill demand of first time buyers and seniors who want to downsize. Home owners don’t want to give up mortgages they got during the pandemic with annual interest rates of 2.5-3% and this fact alone is what’s keeping housing inventory low nation-wide. The National Assn. of REALTORS reported last month that the U.S. housing market is short more than 300,000 affordable homes for middle-income buyers. They found that middle-income buyers can afford to buy less than a quarter (23%) of the listings that are currently being offered for sale around the country. That’s a lot different than five years ago when those same buyers could afford to purchase half of the homes on the market.

As a side note, the Census Bureau report found that Salt Lake County single family home prices increased by almost 60%  during the pandemic and that we had a huge population increase during the pandemic, with more than 23,000 folks from California moving to Utah for work which is three times more people than the next largest group of immigrants-8,300 from Arizona.