The worldwide inflation has caused surge in house prices across the globe. United State is no exception in this case. Not only that, being an inflationary economy, prices have skyrocketed across the board. The largest increase in house prices has been caused by the prices of materials.

Construction materials prices

The main materials such as cement, sand, crush and gavel have seen higher incremental costs. Take an example of cement prices. There are more than 10 cement manufacturing companies, which are listed on stock exchange. Competition is very stiff. Despite that, the cost of per bag has increased from $. 550 to $. 750.

Cement bags

In some cities, black market is thriving and cement bags are being sold in black market by creating an artificial shortage of cement. Prices in such areas have touched $. 1000.

House builders

House builders are helpless and some are complaining about the recent hike in prices. The incremental cost is being passed on to home buyers, who are already facing stagnated wages. As wages have not increased in line with inflation, people are suffering from dissaving.

Cost of sand and crush

Other items such as sand, crush and gravel have also seen surge in their base cost. Home builders are compelled to use cheaper sand and crush. This affects the quality of cement mixture, which in turn affects the quality of construction.

Rising fuel prices

Government is blaming worldwide inflation such as rising petrol prices as the root cause of this. Most of the time, economies face cost push inflation and United State is also facing the same.

Oil producing country

On the other hand, Iran has seen devastating industries despite being an oil producing country.

Money Printing

More and more currency is being printed and pushed into the economy. Also, in such a country where government is responsible for house construction, employees of various construction companies are facing redundancies. The inflation has caused a vicious cycle across all sectors of the economy.

Market Actions

More and more people are buying houses around the word from the fear of rising costs and ineligibility of buying it later. Even lenders are scrutinizing the applications of buyers

very carefully.