The ongoing spike in lumber prices is dramatically increasing the cost of new-construction single-family homes and apartments, the National Association of Home Builders reports.

Lumber prices have tripled over the past 12 months, adding $35,872 to the price of the average newly-built single-family home, the association’s economists have calculated. This lumber price hike has also added nearly $13,000 to the market value of an average new multifamily home, they said, which translates into households paying $119 a month more to rent a new apartment.

The latest Random Lengths prices as of the week ending on April 23 show the price of framing lumber near $1,200 per thousand board feet — up nearly 250 percent since last April when the price was roughly $350 per thousand board feet.

The NAHB attributes the lumber cost spikes to four factors:

  • Reduced production at domestic lumber mills thanks to last year’s stay-at-home orders and social distancing measures.
  • Domestic lumber mills did not ramp up production last year when it became apparent that the housing market would weather the pandemic and even strengthen because of it.
  • Mills did not anticipate the additional demand caused by homeowners buying wood at big-box stores for DIY projects and other renovation work.
  • Tariffs on Canadian lumber imports have “exacerbated” this price volatility.

The association says it has been aggressively lobbying the Biden administration to “address rising lumber prices and to take steps to ensure an adequate supply of lumber and other building materials” on the issues.

Skyrocketing Lumber Prices Add $119 to Apartment Rents

by Banker & Tradesman time to read: 1 min