LINDON — Increasing lumber prices are driving up the cost of new homes, among other problems.
“We’ve never seen anything like this and never expected it,” said Caleb Williams, manager at the Lindon Burton Lumber location. He said prices have been going up for the last couple years, but more steeply since April of last year.
The collision of a ravaging pandemic, which shut down manufacturing plants, and rising import costs from Canada have nearly tripled the cost of a 2-by-4-inch stud. The spike adds about $24,386 to the cost of a new, single-family home, according to the National Association of Home Builders.
“I’ve been in the industry 25 years and there’s never been a big jump like this,” said Daniel McArthur, owner and builder at Pine Canyon Homes. He said customers planning to finish their basements hardly believe him when he tells them the current price of framing supplies.
By the time they have saved up enough money and are ready to begin construction to finish their basements, the price will have changed. A lot of the time, McArthur said he ends up splitting the increased cost with his customers.
“It’s a big hit for both of us,” he said.
But the demand for housing, as well as lumber for do-it-yourself home projects, is way up, meaning builders should be able to weather the volatile market.
Mortgage and interest rates are at all-time lows, which is enticing a lot of buyers.
Another issue is the increased production costs for lumber companies. as well as raised import taxes for lumber coming out of Canada. In a time when lumber demand is high, cutting supply has only made things worse.
“It’s a unique and unprecedented time,” Williams said. “It’s a volatile market that changes almost daily.”
The National Association of Home Builders has asked President Joe Biden, as well as leaders at the U.S. Department of Commerce, U.S. Department of Agriculture and the U.S. Forest Service, to look into the issues surrounding the lumber supply chain, including ways it could be enhanced.
“It is easy to see that current prices represent an intolerable and frequently insurmountable financial burden to home builders and contractors,” a March 12 letter from the association states, adding that home builders and construction firms that have signed contracts at previous prices are forced to absorb the “crippling increases.”
“There is a significant risk that many of these firms will be forced out of business.”
Timber production in the U.S. will need to increase in order to drive down costs associated with transportation and manufacturing, but, the association also believes improving forestation conditions will help, among other things.
“Better forest management practices will not only promote the health of our nation’s forest system but also improve housing affordability,” the letter stated. “As additional supply of domestically produced timber is brought into the market, upward pressure on lumber prices will soften.”
Until then, buyers and builders alike are presumably stuck between a rock and a hard place.