Price of a New House Up $24k Due to Soaring Lumber Costs

Lumber prices are still soaring a year into the pandemic.

Source : Wikimedia Commons

March 18, 2021

Author : Alex Bustillos

The National Association of Home Builders (NAHB) said on Monday that the “unprecedented spike” in lumber costs has increased the average price of a single-family home by $24,000.

The price of a multifamily home has also increased nearly 9,000 since April.

“Although the housing sector continues to lead the nation’s economic recovery, these sharp price increases threaten housing affordability for all Americans,” NAHB said.

Contractor News reported last summer that the price of lumber went up 50 percent between April and July “largely driven by lumber mills closing or reducing output and demand being higher than expected” due to the coronavirus pandemic.

We previously reported that prices peaked in August when lumber futures reached unprecedented highs at $810.3, dipping back down to $484 in October. Today, they are even higher at $854.20. On February 18th, they once again broke records at $1,004.5.

Screenshot of lumber futures via NASDAQ

These new peaks have come despite the U.S. Commerce Department cutting tariffs on Canadian lumber from 20 percent to 9 percent to help manage the crises back in December.

NAHB said they reached out “extensively” to the Trump administration and Congress to “address supply shortages that were harming small businesses, home owners and ultimately the overall economy.” Now, they are petitioning the Biden Administration to the same ends.

“NAHB recently led an effort with more than 35 organizations asking Commerce Secretary Gina Raimondo to examine the lumber supply chain and identify solutions to increase production,” the organization said.

Housing construction, a sector that has been performing relatively well despite the pandemic, dropped a whopping 10.3 percent in February. The drop in residential construction coincided with a drop in applications for new construction, a figure of 10.8 percent. 

However, the Associated Press reports that despite the weather conditions in February which contributed to the decline of construction, “It’s highly likely that housing construction will remain one of the stand-out performers for the economy again this year.”

Contractor News previously reported that single-family housing starts are expected to rise 7 percent in 2021.

Photo via Wikimedia Commons.

Category : Contractor Trades Coronavirus Pandemic Material Costs

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