More than 90 percent of builders say that rising lumber prices are hampering the affordability of new homes, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Recently surveyed builders say that the higher construction costs are causing more prospective buyers to back out of purchasing a new home as well.
Builders are blaming the rising construction costs on the increase in lumber prices over the past year and a half. (They also say a shortage of labor is having an effect.) Ninety-five percent of builders surveyed said that recent increases in lumber prices were hurting the affordability of their new homes, evenly split on whether it’s a “minor” or “significant” impact.
U.S. lumber prices have increased 62 percent since January 2017, according to Robert Dietz, the NAHB’s chief economist. He estimates that a lumber tariff has pushed up the typical new-home price by $9,000.
Shortages of framing lumber are widespread, builders say. More than 30 percent of single-family builders surveyed reported a shortage of framing lumber, the highest percentage since the NAHB began tracking such data since 1994.