Lumber prices have skyrocketed since the pandemic began, adding $24,000 to the price of new homes.- Demand for materials soared during the pandemic as supply tightened with factories idle.
- The National Association of Home Builders chair said vaccine rollout should help bring costs down.
While the pandemic hit the US, everyone seemed to want their own house. With
Now it's clear how much the lumber shortage is adding to the skyrocketing price of new homes: a whopping $24,000.
That stat is courtesy of the National Association of Home Builders (NAHB), which found the price of an average family home increased by $24,386 since April, with the market value of a multifamily home increasing by $8,998 over the same time period.
A report from the NAHB in February said the lumber supply chain impact came as factories shut down almost immediately last March for safety reasons, and then as demand spiked, supply couldn't keep up. Lumber prices have jumped by almost 200% since April 2020.
"The elevated price of lumber is adding approximately $24,000 to the price of a new home," NAHB Chairman Chuck Fowke told
Zillow's Producer Price Index found that February's 2.8% annual increase in sales was the strongest it had been since October 2018, meaning that while more houses are being sold, supply for building materials, like lumber, remain low and costly.
On March 12, the NAHB, along with more than 35 other housing organizations, wrote a letter to Commerce Secretary
"Housing and construction can do their parts to create jobs, boost the economy to its pre-pandemic strength, and provide safe and affordable housing for all Americans, but in order to do so the federal government needs to address skyrocketing lumber prices and chronic shortages," the letter said.
Building 1,000 average single-family homes creates 2,900 full-time jobs and generates $110.96 million in taxes and fees, the letter said, emphasizing the economic benefits the government would reap in finding solutions to the expensive building materials.
Fowke told HousingWire that the continued rollout of
The timeline on when material prices will decline is yet to be determined, but prices might start to come down with President Joe
"Shots in arms and money in pockets - that's important," Biden said.