“It’s sort of like the consumer version of musical chairs; there’s a bit of a rush for a limited supply of things,” said Mark Hamrick, senior economic analyst at Bankrate.com.
But not everything is going to be more expensive forever, Hamrick said. And, if you are weighing a major purchase, it may pay to wait it out.
Here are a few examples:
Anyone considering a bathroom or kitchen renovation will see dramatically higher prices for raw materials.
Sky-high demand for home improvements coupled with supply-chain slowdowns have caused some building supplies, including lumber, steel, gypsum and copper, to hit record highs this year.
A broad mix of residential construction materials is up 12.4% over the previous 12 months, according to the producer price index.
As a result, nearly half of all builders say they are adding escalation clauses to their sale prices because of rising material costs, according to a recent survey from the National Association of Home Builders.
“It’s an unusual period created by the pandemic,” said Jack Kleinhenz, chief economist for the National Retail Federation. “I think people are recognizing that we should wait a little bit until things get back to a better situation.”
If you are thinking of getting away instead of redoing your house, you’re out of luck.
A sudden surge in post-pandemic wanderlust is also making vacations more expensive.
High consumer demand along with a manufacturing shortage of microchips — key parts needed for today’s autos to operate — have squeezed new-car inventory at dealerships across the country. And the used-car market isn’t much better.
“New vehicles — particularly new trucks and SUVs — are basically the 2021 equivalent of toilet paper and hand sanitizer a year ago,” Jessica Caldwell, Edmunds’ executive director of insights, said in a statement.
However, the chip shortage is expected to impact production only through the end of the summer or early fall and prices generally come down toward the end of the year and into January when sellers look to unload last year’s models.
Most of these price increases are temporary.
executive for Ally Bank
“Most of these price increases are temporary, so think carefully about whether it’s worth dipping into your savings and paying a premium,” said Anand Talwar, deposits and consumer strategy executive for Ally Bank.
“Instead, wait until inventories build up again and prices drop.”
If you must buy something that suddenly costs more, any extra savings will shield you from having to rely on credit cards or other types of high-interest debt.
“If the pandemic has taught us anything, it’s that your emergency fund isn’t a nice-to-have, it’s a need-to-have,” Talwar said.
To get there, consider setting up an automated deposit to your rainy-day fund, Talwar advised.
“You’ll build and maintain your financial breathing room and keep the past year’s hard-won savings from walking out the reopening door.”