Lumber Prices Reach New High, Sidelining Projects

Lumber prices are up more than 170% over the past ten months, sidelining homebuyers, pausing pending sales and forcing builders to put new projects on ice. 

New data from the National Association of Home Builders and Random Lengths shows that the price of lumber hit a record high this week, adding thousands of dollars to the cost of new homes. Prices began rising again in December following a three-month lull that began in September 2020, a trend that’s diverged from initial predictions that construction costs would actually decrease during the pandemic.

In a statement, NAHB Chairman Chuck Fowke—who’s also a custom home builder in Tampa—urged President Biden and Congress to push domestic lumber producers to ramp up production and end tariffs on Canadian lumber shipments into the US, which NAHB maintains are creating and exacerbating “unprecedented” price volatility in the lumber market.

The increase in prices is delaying construction starts coast to coast, compounding an already-existing supply problem in many markets and sending prices soaring. Builders are often forced to put construction on hold due to rising costs, and NAHB maintains that appraisers often don’t take rising lumber costs into account, which disrupts sales and prevents closings in some cases. 

“Clearly these price increases are unsustainable, particularly in light of a continued housing affordability crisis,” said Fowke. “Given this ongoing period of high demand, the Commerce Department should be investigating why output from lumber producers and lumber mills are at such low levels.”