Soaring lumber prices are having an outsize effect on the price of new homes, new data shows.
According to data released Tuesday by the National Association of Home Builders, lumber prices are skyrocketing again after months of moderation, causing the average price of a new single-family home to rise by $18,600 according to the association’s estimates.
The price increase has also affected added $7,300 to the average value of new multifamily homes, adding $67 a month in costs for families renting new apartments.
According to the lumber industry trade journal Average Lengths, the price of framing lumber topped $1,000 per thousand board feet as of Dec. 29, an increase of 167 percent since late August. Lumber prices peaked at $1,500 per thousand board feet last May — tacking on $36,000 to the price of new homes, before declining through August, only to spike dramatically again.
Lumber prices have fluctuated substantially during the pandemic, due in part to a work slowdown at lumber mills in the early days of the pandemic, and a miscalculation by lumber suppliers in the same time period that demand for new housing would be lower over the coming years due to the pandemic. Instead, it’s skyrocketed.
The NAHB credited placed the blame on continuing supply chain disruptions, the Biden administration’s doubling of tariffs on Canadian imports into the U.S., and the widescale destruction of timber during last season’s wildfire season with the most recent price spikes.