Record-High Lumber Costs Add $16K to Cost of New Homes
NAHB says lumber costs 170% more than in mid-April, and the average cost of construction has risen so much that 2.1M buyers can no longer afford a new home.
WASHINGTON – Shoppers shopping for newly constructed homes face sharply increased prices as the cost of lumber soars to record highs. In fact, the National Association of Home Builders (NAHB) says it’s pricing many buyers out of the market.
Recent lumber price spikes added more than $16,000 to the typical cost of a new single-family home, and the multifamily sector also feels the impact, with the typical apartment unit construction cost rising more than $6,000, according to data from NAHB.
The increase has priced more than 2.1 million U.S. households out of the market for a median-priced new home, according to NAHB.
Average lumber prices have increased more than 170% since mid-April, reaching a record high of more than $800 per 1,000 board feet, a common industry measure. Builders want lawmakers to take action, advocating for an increase in supply and reduced cost of lumber. NAHB warns that lumber shortages could stress the overall housing market beyond its current state if too many buyers are priced out of the new-home market.
“Residential construction can lead the nation out of its current economic downturn, as it has during virtually every major economic disruption over the past five decades,” writes Chuck Fowke, NAHB’s 2020 chairman, in a column at BuilderOnline. “But it is vital that elected officials support policies that help America’s home builders gain access to reasonably priced building materials, particularly lumber.”
Source: “NAHB Warns That Record-High Lumber Prices Could Drive Up Housing Costs,” BUILDER (Oct. 9, 2020)
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