Lumber prices are climbing once again, adding thousands of dollars to the cost of a new home. Builders and consumers thought relief had arrived when the price of lumber started to fall late last year, after soaring to record highs earlier in the year. But starting in December 2021, lumber prices again started to increase.
Lumber prices are about triple their average pre-pandemic levels, reports Random Lengths, a lumber industry news site.
That jump in costs has added more than $18,600 to the price of a newly built home, the National Association of Home Builders reports.
The increases are also adding nearly $7,300 to the cost of an average new multifamily home. That translates to about $67 a month more in rent for a new apartment, according to NAHB data.
Sawmills are unable to keep up with the high demand for construction, contributing to the rise in costs. Sawmill output significantly trails the increase in housing starts, builders say. Also, ongoing supply chain disruptions, such as tariffs on Canadian lumber imports and a strong wildfire season, are also behind recent price rises.
Overall, building material prices have climbed 20.3% annually and have risen 28.7% since January 2020, according to NAHB data. The jump in building material prices has been led by rising costs for lumber and paint.
Source: “Led by Lumber and Paint, Building Material Prices Jump in January,” National Association of Home Builders’ Eye on Housing blog (Feb. 15, 2022) and “Soaring Lumber Price Adds Nearly $19,000 to the Cost of a New Home,” CNBC (Feb. 15, 2022)
