Rising Lumber Prices and Lack of Supply Threaten Consumers' Housing Options

Housing Affordability
Published

This post has been updated.

Housing affordability has been a critical issue across the country for years, as factors such as a shortage of lots and labor have led to a limited supply. As lumber prices once again approach all-time highs amid a supply shortage, this crisis only gets worse, as housing prices continue to soar and builders face challenges to meet ongoing housing demands.

“The continuing rise in building cost — including rising lumber prices, availability of material, etc. — is causing a sudden downturn in new home starts,” said Cory Lord, a builder based in Georgia. “We are finding it hard to complete current contracts on time, and home owners are not able to afford to sign new contracts with the escalated cost.”

The rising supply costs are exacerbated by the uncertainty of when supplies will be available to complete the home in a timely manner and whether or not the homes will appraise at the correct price to reflect these rising costs.

“We had one home owner walk away from a contract at signing because we could not promise her a completion on her home within a five-month time frame, even though we explained to her that the current limited availability on some products was causing delays that were beyond our control,” stated Lord.

Other builders have noted that market uncertainty extends to prospective home owners’ financial positions as well, such as the risk of unemployment or retirement with a fixed income, which often makes them more apprehensive or less flexible to move forward with higher costs.

“In such a fragile marketplace, consumers cannot afford to add another $10,000 to $30,000 for the frame package,” observed Tabitha Casamento, a builder in Upstate New York. “I have repeatedly asked when this will normalize from a national supplier, but there’s no end in sight.”

Builders are doing everything possible to avoid pricing consumers out of homes while still maintaining competitive prices necessary to operate their businesses — especially given the potential long-term impacts on consumers, as the purchase of a home is often a key factor in building wealth.

“We’ve had to raise sales prices by more than $50,000 since August because of rising lumber prices,” shared Michael Betcher, an affordable first-time buyer production home builder in Arizona. “This prices most buyers out from being able to qualify for a new home, and perpetuates the cycle of renting and not building equity.”

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Workforce Development

Oct 10, 2025

HBI Report Reveals Economic Impact of Labor Shortages on Housing Production

The 2025 Fall Labor Market Report reveals the true cost of too few workers in the residential construction industry, and provides insights on generational and demographic shifts in the workforce.

Safety

Oct 10, 2025

Fighting the Stigma of Mental Health in Construction

Friday, Oct. 10, is World Mental Health Day, an annual observance from the World Health Organization to raise awareness of mental health issues around the world and to mobilize efforts in support of mental health.

View all

Latest Economic News

Economics

Oct 10, 2025

Vinyl Surpasses Stucco as Most Used Principal Exterior Wall Material

In 2024, vinyl siding was the most used principal exterior wall material for homes started. It holds just over a quarter share of homes, slightly surpassing stucco for the first time since 2018.

Economics

Oct 09, 2025

Remodeling Market Sentiment Improves in Third Quarter

In the third quarter of 2025, the NAHB/Westlake Royal Remodeling Market Index (RMI) posted a reading of 60, up one point compared to the previous quarter. With the reading of 60, the RMI remains solidly in positive territory above 50, but lower than it had been at any time from 2021 through 2024.

Economics

Oct 08, 2025

Refinancing Activity Surges in September

Refinancing activity surged in September, marking the largest monthly increase since the COVID-era of ultra-low interest rates. This increase followed mortgage rates dropping below 6.5% for the first time since October 2024 in anticipation of rate cuts that ultimately materialized. ­­