Between mid-April and mid-September, lumber prices soared more than 170%. This unprecedented lumber price spike added nearly $16,000 to the price of a typical new single-family home.
Though prices began drifting lower in the early fall, they now appear to be on the rise yet again. These sharp increases threaten the affordability of new homes and the housing sector, which is leading the nation’s economic recovery.
The escalating lumber prices are due to the fact that there is not enough domestic production. Many mills reduced production due to stay-at-home orders and social distancing measures enacted by state and local governments at the onset of the coronavirus pandemic. Mill operators projected that housing would be adversely affected by the crisis and anticipated a large drop in demand. But housing weathered the storm much better than was predicted, and demand for lumber has accelerated.
NAHB continues to seek prompt action from the Administration by calling on domestic lumber producers to ramp up production to ease growing shortages and making it a priority to work with Canada on a new softwood lumber agreement. Working in tandem with NAHB, nearly 100 lawmakers recently sent a letter to President Trump seeking prompt action to address lumber supply shortages and subsequent price hikes that are threatening the housing market and economy.