Home builders don’t appear to be getting a respite from last year’s high lumber prices.
The National Association of Home Builders (NAHB) said that the current cost of lumber continues to add thousands of dollars to the price of new homes. As a result, potential home buyers are being priced out of the market.
Citing Random Lengths, the wood products pricing and information provider, the price of lumber hit another record high last week with prices more than 170% over the past 10 months.
Chuck Fowke, NAHB chairman and a home builder in the Tampa, Fla. market, said that the NAHB is urging President Biden and Congress to help mitigate “this growing threat to housing and the economy.”
The NAHB wants the government to push domestic producers to increase production, which could ease lumber shortages. Additionally, the NAHB said that it wants an end to tariffs on Canadian lumber shipments into the United States.
Fowke says the tariffs are “ exacerbating unprecedented price volatility in the lumber market.”
The NAHB met with U.S. officials several times last year to discuss high lumber prices. And tariffs on Canadian lumber imports were rolled back last November.
Lumber prices are not only deterring home buyers, but they are also causing sales to fall through. Builders are then being forced to put projects on hold during a period when housing inventories are at a record low.
“The increase in lumber prices is forcing our company to delay construction starts, which will only exacerbate the lack of supply in our market,” said NAHB First Vice Chairman Jerry Konter, a home builder and developer from Savannah, Ga.
Alicia Huey, a high-end custom home builder from Birmingham, Ala., and second vice chairman of NAHB, said that the price of her lumber framing package on an identically-sized home has more than doubled over the past year from $35,000 to $71,000. “This increase has definitely hurt my business,” she said. “I’ve had to absorb much of this added cost and even put some construction on hold because I would be losing money by moving forward.”
“Appraisers are not taking rising lumber costs into account, which is disrupting home sales and preventing closings,” added NAHB Third Vice Chairman Carl Harris, a custom builder from Wichita, Kan.
A recent survey of NAHB members reveals that 96%t said inconsistent access to building materials is their most urgent concern. In turn, supply shortages are leading to soaring prices.
Compounding the lumber situation is the price of oriented strand board (OSB), nearly tripling since last April.
“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.”