savings eroding while planning to build a home - what home materials to buy now?

[Kevin Aster Tin Obin]

If you had cash in savings account today saved up to build a home, with increasing prices of everything, what could you buy now to save on final price of home in 1-2 years?  ..lock in builder and pay first payment? buy lumber stocks?  Buy a tractor to landscape the yard and dig a foundation, order windows and doors?  Buying electrical and mechanical systems?  learn how to do it all yourself?  Buy VTI or bet on Black/RED?

Curious if anyone is building this year and how you are offsetting building costs in 2022..

[reeshau]

If you are waiting 2 years, I would do as little as possible.  The labor market is tight.  Homebuilding is at its highest since the 2008 Financial Crisis. (although, just now passing long-term averages)  Global supply chains are in an uproar as they still are sorting out Covid snags.  And the Russian invasion of Ukraine has spiked many commodities, not least of which is oil.  (and therefore, transportation)

All of these factors are cyclical.  While inflation in consumer goods may be sticky, oil certainly isn't.  As as supply chains readjust to regional risks, their costs, and therefore prices, will moderate.

If you have cash in the bank, do what you can to keep it growing.  Buy I bonds.  But any purchasing step taken now will be at or near a peak.

Of course, if you are serious about a house, then hold your nose and go for it.  Putting your life on hold for 2 years is a high cost, in non-monetary terms.  If this is your forever home, then get going on forever.  Yeah, you can try to manage the cost: be very flexible on materials, and look at what's available rather than pushing for custom orders.  Do work in the off-season, if your area has one.  But you are moving with the herd at a crazy time: just make peace with that.

[chemistk]

There's certainly no way your home budget is fully funded - I have yet to encounter anyone who has been able to take on a major remodel or new construction and come in under budget while not making a single compromise. And if they did come in under budget, the original bid was way too high.

I'll second that the labor market is tight and if you were to build now, any savings you'd see on pre-purchasing raw materials is going to be wiped by labor.

Not to mention, supply chains are still wonky and prices for some materials are much higher than they need to be. Plus whatever you buy, you'll need to store and you can't exactly store it all outdoors. Which leads me to wonder - why are you waiting at all? The only 'good' reason assuming you already have the land is that you're waiting for labor costs to come back down and for contractors to have time to commit to a custom build.

So I guess then the question becomes why is your entire fund sitting in cash? You could at least park it in a high yield savings account or buy some short term bonds and at least earn a few extra bucks interest.

[sonofsven]

If you had cash in savings account today saved up to build a home, with increasing prices of everything, what could you buy now to save on final price of home in 1-2 years?  ..lock in builder and pay first payment? buy lumber stocks?  Buy a tractor to landscape the yard and dig a foundation, order windows and doors?  Buying electrical and mechanical systems?  learn how to do it all yourself?  Buy VTI or bet on Black/RED?

Curious if anyone is building this year and how you are offsetting building costs in 2022..

It's impossible right now because you can't know where prices on materials will go in the next three months. Let alone two years.
I'm a builder and, yes, prices are high. Every single sub is higher than the last house I built in '21.
You really don't want to store windows and doors for years, do you? Anything you buy now will be out of warranty by the time you use it.
It's possible material prices will go down.
Right now the main problem is delays. In my area no one can get garage doors. I framed up a three car garage door(s) and covered it with plywood so I could get insulation and drywall in. I ordered my garage doors early January, I might get them in July? Nobody knows.
But interior doors are three weeks out, like normal. Windows are eight weeks out, where they're usually ten days (vinyl), it's just random. Cabinets, six months. And it's probably different in every area.
It makes it hard to schedule.
One way I'm offsetting high costs is by mainly sticking to the plan. I always make some changes to the stock plans that add cost but I'm trying to minimize that.
The main "offset" is the increase in the cost of the final product, but I'm selling at the end of the build, YMMV.

[mozar]

I recommend not diy-ing a foundation.

[Jon Bon]

There is nothing you can, or should do.

I built in 2021 during the most historic run up of material prices in memory fun times! Other then literally standing guard over my  lumber package delivery there is little you can do to offset the price of materials or labor going up.

Construction materials are difficult to store and normally susceptible to weather, theft, dirt or other inventory shrinkage. You are going to have a hard enough time keeping your lumber dry and straight during a typical construction project let alone buying it 6 months in advance. Furthermore your going to change your mind, a lot. So you are going to want to move a window or change a layout or whatever. If you buy your stuff too far in advance you cant do that.

Lots of research is a good idea. Really think through your plans, and ask friends what they think of your prints etc. I mean there are thousands of decisions you will end up making. Give yourself a bunch of hypotheticals etc. That and save as much money as you can!

It sucks to have to wait and watch materials go up, but buying stuff now is a terrible idea.

[Dicey]

I agree that now is the time to...wait.

We're currently stockpiling materials to do a complete remodel of a 1B, 1BA 708 sf condo we just bought. We are scouring CL for materials. We bought the flooring from someone who had overestimated a much larger job for under $2/ft. We bought the appliances at our local high-end dealer's annual parking lot sale. We ordered the stove because they didn't have what we needed in stock. Two days later, we found the exact stove on CL for $500 less. It was in a new-built home and the buyer wanted to upgrade it, so it was never used. We chose the countertops by going to the fabricator's boneyard to find something we could work with. The cabinetry is RTA sourced from a local place that stocks it. We designed the kitchen and bath around what we could get. Flexibility is key to saving money.

Oh, and the glass shower enclosure we ordered a month ago from Lowe's for delivery on 4/25 was just canceled yesterday. We found it for slightly less elsewhere, but who knows if they can fulfill the order?

All of this takes time and requires you to know what you're doing. It also take storage space. Our 1050sf garage is getting pretty full as we amass materials, and we're only doing a remodel, not a whole-house build. My tiny examples are nothing compared to a whole house. Which leads to the question of why you want a stick built house anyway, and why now?

Did I mention I'd wait?