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Expensive lumber costs have added $36,000 to the average price of a new home, report finds

Added 05-03-21 04:14:02pm EST - “Lumber prices are up 340% compared to a year ago, which only adds to the sticker shock facing homebuyers already dealing with an inventory crisis.” - Businessinsider.com

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Posted By TheNewsCommenter: From Businessinsider.com: “Expensive lumber costs have added $36,000 to the average price of a new home, report finds”. Below is an excerpt from the article.

Just a few months ago, in February, the National Association of Home Builders (NAHB) released shocking data about how the historic appreciation in lumber prices was crimping the housing market. A newbuild was $24,000 more expensive, on average.

The housing market took off last summer, as the pandemic enabled many to work from home indefinitely, and with mortgage rates so low, many people rushed to buy new homes. But the pandemic shut down lumber production, and it hasn't kept pace with building since.

"This unprecedented price surge is hurting American home buyers and home builders and impeding housing and economic growth," NAHB Chairman Chuck Fowke said in a statement. "These lumber price hikes are clearly unsustainable. Policymakers need to examine the lumber supply chain, identify the causes for high prices and supply constraints and seek immediate remedies that will increase production."

A report from the NAHB in February said the lumber supply chain impact came as factories shut down almost immediately last March for safety reasons, and then as demand spiked, supply couldn't keep up. Lumber prices have jumped by 340% compared to last year.

Insider reported on March 26 that because lumber prices are so high, home builders have been building fewer homes and intentionally raising prices to keep up with the high demand for houses amidst the low supply of lumber.

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