With its price almost doubling since the start of the year, copper is the latest commodity causing headaches among builders who have seen record levels of construction activity, an abnormally destructive hurricane season and a changing global marketplace force up the costs of building materials faster than overall inflation, according to NAHB economist Michael Carliner.
There are about 440 pounds of copper in a new 2,100-square-foot, single-family home, according to the Copper Development Association - 200 pounds in wire and another 175 pounds in pipes and plumbing fixtures. Based on that estimate, Carliner calculated that increases in copper prices have boosted the price of a modest-sized home by more than $1,000 in the last three years, or $500 in just the last six months.
Although an "explosion" in copper prices earlier this month, driven largely by speculation, is already showing signs of being partially reversed, Carliner noted that the rising price of copper has only lately been making its way into manufactured items used by builders, and further price increases are likely.
"Copper prices are likely to remain high and prices for many copper-using materials and products will become more expensive," he said. "Air conditioning equipment, for example, uses a lot of copper, but the prices haven't adjusted."
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