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What's Behind the Surge in Lumber Prices?
Friday, May 7, 2021
In a recent post on the National Association of Home
Builder's (NAHB's) Eye on Housing blog, chief economist Paul Emrath said rising
softwood lumber prices have added $35,872 to
the price of an average new single-family home, and $12,966 to the market value of an
average new multifamily home. The price increases affect any softwood used in
structural framing, sheathing, flooring and underlayment, interior wall and
ceiling finishing, cabinets, doors, windows, roofing, siding, soffit and
fascia, and exterior features such as garages, porches, decks, railing, fences,
and landscape walls. Products include not just dimensional lumber, by plywood,
OSB, particle and fiberboard, shakes and shingles. Emrath quotes prices from data tracker Random Lengths that, as of April
17, 2020, the total cost to a builder for all the lumber and manufactured
lumber products described above was $16,927 for the products in an average
single-family home, and $5,940 for the products in an average multifamily home.
By April 23, 2021, the fully phased-in costs have risen to $48,136 for the
softwood lumber products in an average single-family, and $17,220 for the
products in an average multifamily, home. These estimates represent
a 184 percent and 190 percent increase in
single-family and multifamily builders' lumber costs, respectively, over the
past year and translates to a rent increase of $119 per month for a new
apartment.
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