Bob Fraser's home insurance replacement cost is 70% higher than what his house is worth. Construction and material costs have jumped 10-30% in many areas, making new builds unprofitable at current home prices and squeezing housing supply.
We also saw costs dramatically increase, right? Building costs, labor costs, materials costs. I mean, skyrocketed. I just got a new insurance policy on my house and they came and did an inspection and my replacement cost is 70% higher than the fair market value of my house. I'm like, what? During this big run-up, we also saw costs dramatically increase, right? Building costs, labor costs, materials costs, I mean, skyrocketed. We saw, you know, 10, 20, almost 30% increases in some areas in materials costs and construction costs. So if someone has to build a house that's priced 70% higher than mine to make money, well, then they can't even compete with my house. So they're not going to build it. So again, it just keeps new supply off the market until prices rise.
