Rising Lumber Prices and Lack of Supply Threaten Consumers' Housing Options
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.”
Latest from NAHBNow
Jul 21, 2025
NAHB Mourns Passing of Rick HermanNAHB mourns the passing of Rick Herman, longtime Executive Officer of the Rochester Home Builders Association (RHBA) in New York. Rick joined RHBA 30 years ago and served as a tireless advocate for members in Rochester and around the state.
Jul 18, 2025
Metals and Equipment Drove Material Prices Higher in JuneResidential building material prices rose in June, driven primarily by higher construction machinery and equipment part prices, based on data from the most recent Producer Price Index (PPI). Metal commodities also experienced significant increases, following recently implemented tariffs on steel and aluminum.
Latest Economic News
Jul 21, 2025
Use of Private Water and Sewer Systems in New Single-Family HomesThe share of new single-family homes built with individual septic systems declined slightly in 2024 compared to the previous year, while the share of homes served by private wells remained steady.
Jul 21, 2025
Sales of Lower-Priced New Single-Family Homes Declined Over the Past Five YearsFrom 2020 to 2024, sales of lower-priced new homes declined significantly as the market moved toward higher-priced segments. Rising construction costs—driven by inflation, supply chain disruptions, and labor shortages—as well as higher regulatory costs, made it increasingly difficult for builders to construct affordable homes.
Jul 18, 2025
State-Level Employment Situation: June 2025Nonfarm payroll employment increased in 27 states in June compared to the previous month, while employment decreased in 23 states and the District of Columbia. According to the Bureau of Labor Statistics, nationwide total nonfarm payroll employment increased by 147,000 in June following a gain of 144,000 jobs in May.