Shoppers seeking newly constructed homes are facing sharply increased prices as the cost of lumber has soared to record highs. Many buyers are finding themselves priced out of the new-home market, builders say.
Recent price spikes in lumber have added more than $16,000 to the typical cost of a new single-family home. The multifamily sector is also feeling the impact, with the typical apartment seeing an increase of more than $6,000, according to data from the National Association of Home Builders.
The increase has priced more than 2.1 million U.S. households out of the market for a median-priced new home, according to the NAHB.
Average lumber prices have increased by more than 170% since mid-April. They’ve reached a record high of more than $800 per 1,000 board feet, a common industry measure. Builders are advocating for lawmakers to take action to increase the supply and reduce the cost of lumber, saying lumber shortages could stress the housing market beyond its current state if too many buyers become priced out of the new-home market.
“Residential construction can lead the nation out of its current economic downturn, as it has during virtually every major economic disruption over the past five decades,” writes Chuck Fowke, NAHB’s 2020 chairman, in a column at BuilderOnline. “But it is vital that elected officials support policies that help America’s home builders gain access to reasonably priced building materials, particularly lumber.”