Congressmen Call on Biden to Intervene in Rising Lumber Costs

Lumber costs have increased rapidly in the last year, and two congressmen are calling for a legislative solution. Representatives Jim Costa (D-California) and Jodey Arrington (R-Texas) have sent a letter to President Biden to intervene, asserting that rising building materials costs and supply shortages could derail economic recovery and pressure an already constrained housing market.

“Unfortunately, this unprecedented price increase on new homeowners, as well as home builders, will persist until new sawmills come online and current mills re-open and operate at full capacity,” the two congressmen wrote in the letter, which requested the administration connect with all stakeholders, including sawmills, home builders, loggers and distributors, to find an appropriate solution.

The National Association of Home Builders echoes the call for administrative action. According to the organization, lumber costs have tripled since April 2020, increasing the cost of construction on a standard single-family home by $24,000. NAHB is also requesting the Commerce Department investigate the issue, including the low levels of lumber production and sawmill output despite the high demand for product.

This is not the first time that congressmen have called on the executive branch to investigate lumber costs. In the fall, Costa and Arrington sent a similar request to the Trump administration. The letter was also backed by 100 members of congress.

Lumber prices have increased steadily since the start of the pandemic. In February, lumber costs reached a new high, growing 170% over the last 10 months. At that time, NAHB chairman and Florida-based homebuilder Chuck Fowke urged President Biden and Congress to push domestic lumber producers to ramp up production and end tariffs on Canadian lumber shipments into the US.

While lumber prices have increased, overall pricing trends have been volatile. At the end of last year, lumber costs seemed to fall as new supply ramped up to respond to demand, but at the start of 2021, prices surged again. Now many experts expect lumber prices to be high through 2021 but below the extreme peaks recorded in August 2020 and December 2020. However, with such volatility, predicting pricing patterns is challenging. JLL says that accuracy depends entirely on the starting date of any forecast timeframe, though lumber prices will again be the most volatile of all construction materials in 2021.