(NAHB).<\/span><\/p>\nBuilding costs for multi-family homes have shot up accordingly, adding $13,000 to the market value of a new apartment. If passed onto renters, this would cause monthly payments to rise by $119.<\/p>\n
Citing data from Random Lengths, a company that tracks pricing information for wood products, the report indicates that the price of framing lumber has skyrocketed nearly 250 percent annually. During the week ending April 23rd, the price surged to $1,200 per thousand board feet, up from $350 per thousand board feet one year earlier.<\/p>\n
Even within the past three months, the added cost of constructing a single-family home has gone from $24,000 to nearly $36,000. By comparison, rising lumber prices tacked on $16,000 to material costs in August 2020.<\/p>\n
A number of reasons have been\u00a0attributed to the shortage, among them sawmill closures related to COVID-19 outbreaks, a mountain pine beetle infestation in British Columbia, surging demand from do-it-yourselfers and the ongoing homebuilding boom.<\/p>\n
\u201cThese lumber price hikes are clearly unsustainable,\u201d said NAHB Chairman Chuck Fowke. \u201cPolicymakers need to examine the lumber supply chain, identify the causes for high prices and supply constraints and seek immediate remedies that will increase production.\u201d<\/p>\n
Historically low inventory in the resale market combined with favorable mortgage rates\u00a0have prompted buyers to purchase pre-construction homes\u00a0at a breakneck pace. Some homebuilders are reportedly delaying construction, hoping that the price of lumber will eventually fall once production ramps up.<\/p>\n
But this is expected to have an adverse effect on material costs, keeping them elevated for months to come as builders kick off construction on new developments. \u201cRising lumber costs will likely continue to be a problem for builders, which is somewhat of a concern,\u201d said LendingTree Chief Economist Tendayi Kapfidze.<\/p>\n
Continued\u00a0demand and low mortgage rates are helping to offset\u00a0soaring lumber prices for now, but the supply shortage\u00a0threatens to worsen housing affordability.\u00a0\u201cThis unprecedented price surge is hurting American home buyers and home builders and impeding housing and economic growth,\u201d\u00a0added Fowke.<\/p>\n
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<\/a>Photo: James Bombales<\/em><\/p>\n