Construction costs could be putting a end to hopeful home buyers and builders. Rising oil prices are raising construction costs. So far the biggest price jumps have been with asphalt, roofing, siding, and paved drive ways.

Tony Callahan, the senior VP for Purchasing, Planning & Design for Beazer Homes USA, explains this, saying that "Any material that is petroleum-based or transportation-intensive will have pricing pressure during periods of rising oil prices,...Manufacturers are trying to push cost increases through for materials like asphalt roof shingles, carpet, insulation." In April, the wholesale cost in building material with new home construction went up 3.4%.

Things have already been tough on builders due to cancellations from over 40% of their buyers, as well as from write downs with undeveloped land. Builders may also face higher interest rates as some rating agencies are giving low ratings, branding some companies as ¨junk¨.

Builders are now trying to cut down on their costs by using cheaper materials and also by building smaller sized homes that can be more quickly sold at lower prices. Beazer has also thought of another way to lower costs, by limiting trips to the work site to save on gas and time.