Lumber prices are on the rise again, nearly tripling in the last four months of 2021 and pushing up the price of an average new home by more than $18,600, the National Association of Home Builders said.
After the association released its calculations earlier this month, lumber prices have only continued to climb, jumping 15% to $1,192 per 1,000 board feet last week—the highest level since June. That’s still well below the $1,514 seen last May, after sawmills curtailed production in anticipation of weak demand during the pandemic. But the pandemic had an unexpected effect: Demand soared as the housing market and do-it-yourself home projects caught fire. Once sawmills returned to full capacity and supply caught up, prices slowly sank last summer only to rebound sharply as supply tightened again, as the chart below shows.
The latest surge in lumber prices stems from a variety of factors, the builders association said. They include the White House’s decision to double the tariffs on Canadian lumber imports, ongoing supply chain disruptions affecting nearly every industry, and an “unusually strong” summer wildfire season in the Western U.S. and British Columbia.
As if new single-family houses weren’t costly enough already—third-quarter median new home prices rose almost 20% from the year-ago period, to a record $404,700—the resurging lumber prices are exacerbating things. And it’s not just homebuyers but also renters who are paying the price. Lumber added nearly $7,300 to the market value of the average new multifamily home over the last four months of last year, which translates into households paying $67 a month more to rent a new apartment, the association said.
Have a question, comment, or story to share? You can reach Medora at firstname.lastname@example.org.