The California wildfires are now the deadliest in the state’s history having taken the lives of at least 31 people, with scores still missing, and destroying thousands of homes.
The Camp Fire in Northern California continues to burn demolishing more than 6,000 structures, while the Woolsey Fire barreled through suburban Los Angeles destroying homes in Ventura County and Malibu.
Along with the human toll, other damages are reportedly expected to cost the state, insurers and homeowners, upwards of $19 billion, according to Bloomberg.
“It’s very, very expensive,” National Association of Home Builders president Jerry Howard told FOX Business’ Charles Payne on Monday.
Insured homeowners will go through an inspection process to determine a payout that will involve hiring contractors, allocating laborers and funding materials to rebuild.
“[Recovery] expense is going to come in as I mentioned labor shortages. The expense in building materials are higher they’ve been and now mortgage rates are going back up,” Howard said. “It’s a triple whammy for these poor people.”
The California wildfires will weigh on the U.S. housing market which is already facing headwinds with regulatory burdens, rising land costs and labor shortages.
“We are getting hit on both ends,” Howard said. “Building materials cost at the front end of the pipeline and now you are going to charge the consumers more at the backend. It’s a very, very touchy time.”
The NAHB president says he expects the Federal Reserve to raise interest rates at least twice in 2019, on top of likely a fourth hike this year, costing consumers more to borrow as mortgage rates rise.
“We hope that they [Federal Reserve] will listen to us right now. We want to tell them that we’re treading in dangerous water,” Howard said.
Mortgage rates are hovering around a 7-year high with a 30-year fixed rate sitting around 4.94 percent, according to Freddie Mac.