As lumber prices surge in the past several months, the average price of a new single-family home has increased by $24K and nearly $9K to the average new multifamily home.
The pandemic has caused major highs and lows for the lumber industry. In addition, the global shutdown has put construction activities to a halt resulting to a decrease in lumber prices. And as building activities resumed, the demand is high, but insufficient domestic production. This resulted to a 180% increase or more – from roughly $350 per 1000 board feet to over $900 per 1000 board feet in specific locations.
To better see how the lumber prices increased from the wake of the COVID-19 pandemic through today’s current price, check this graph from the Market Insiders.
To check the lumber prices in detail from the start of the pandemic to the recent, check these historical prices.
While there may be cheaper alternatives to lumber, this record-high lumber price could have serious consequences not only to homebuyers, but also for the home-building industry.
- Newly built homes will have higher prices.
- Builders will renegotiate contracts with buyers.
- Woodworking companies worry that this could crush the furniture market.
From roughly $300 last year to more than $1,000 as of March, this is indeed a price shock brought by COVID-19 pandemic restrictions hampering lumber production and suspending of constructions, or renovations.
With so much instability in the cost of lumber, NAHB has redoubled its efforts to examine the lumber supply and identified solutions to this lumber crisis. Earlier this March, a letter has been sent by congressional representatives Jim Costa (D-Calif.) and Jodey Arrington (R-Texas) to President Joe Biden and the Department of Justice requesting federal action to examine the record-high lumber prices and find solutions to curb the rising cost of building materials.
The Associated General Contractors of America (AGC) also wrote an open letter to President Biden in late February describing the effects of soaring lumber prices on the multifamily homes and non-residential construction industries – “these rapidly escalating costs threaten the viability of affordable housing developments as well as further renovation work needed on nonresidential buildings.”
Lumber prices have skyrocketed and it’s tough to predict when we can expect to see the lumber prices to decline this 2021 now that vaccine rollout is accelerating.
So, when will lumber prices get back to normal?
If you want to check more news and be updated on the rising lumber prices, please visit the following references:
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