The price of lumber is soaring, making new home construction and do-it-yourself home projects even more expensive.
By the numbers: Lumber costs have surged more than 200% over the last year, according to the National Association of Home Builders.
- The “price per thousand board feet” surpassed $1,100 in mid-April, up from less than $500 in June 2020, as the News & Observer recently reported.
- The spike has added more than $24,000 to the average price of a new single-family home.
The state of play: Lumber demand is far outpacing supply. During the pandemic, shutdowns forced sawmills to stop production.
- At the same time, quarantining Americans embarked on all types of DIY projects, bolstering home-improvement companies like Lowe’s.
- Lumberyards and homebuilders held off on buying lumber for months, hoping that prices would come down, Fortune reported.
- The housing market hasn’t slowed down, thanks in part to historically low mortgage rates and millennials’ growing desire for homeownership, per AP.
Grandfather Homes, a custom builder, typically builds 18–20 homes per year in Charlotte — many for out-of-town buyers — owner Matt Ewers tells Axios. The pandemic has only increased interest here, he adds.
- Ewers estimates lumber prices are adding an additional $100,000–$150,000 to the cost of a new $1 million home. Buyers often find out about these additional costs after construction begins.
- “We haven’t managed to play catch up,” Ewers says of the tight lumber supply. “Those willing to pay the extra cost are getting what’s left.”
What’s next: It’s anybody’s guess when things will cool down.
Michael Goodman, director of specialty products at Sherwood Lumber, told Fortune “a mild pullback” is possible later this year if sky-high prices cause demand to slow.