‘Unprecedented’ Lumber Prices Add $25k To New Home Cost

Mar 18, 2021, 7:28 PM | Updated: 8:40 pm

LINDON, Utah – Demand isn’t the only thing driving up the cost of a new home. Out-of-control lumber prices have added tens of thousands of dollars to the price of construction, according to a national analysis.

“It’s a unique and unprecedented time,” said Caleb Williams, manager of Burton Lumber’s Lindon location. “It’s a volatile market that changes almost daily.”

Williams said he’s just as surprised as his customers to see the soaring cost of the lumber.

“We’ve never seen anything like this and never expected it,” he said.

Since April 2020, the spike in lumber prices has increased the price of a new, single-family home by $24,386, 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 with Pine Canyon Homes.

McArthur said he’s been finishing a lot of basements in Utah County and that customers don’t believe him when he tells them about the current price of framing supplies.

“Forever it was like two to three bucks for a 2×4 stud,” he said. “Now it’s hitting like seven dollars—that’s triple the price for a 2×4.”

McArthur said families save up money to finish basements and by the time they are ready to start construction the price has changed. Lots of times he ends up splitting the price increase with his clients.

“It’s a big hit for both of us,” he said.

The association, along with other housing groups, sent a letter last week to U.S. Department of Commerce urging an examination of the lumber supply chain.

“It is easy to see that current prices represent an intolerable and frequently insurmountable financial burden to home builders and contractors,” the letter said.

The letter also asked the Commerce Department to find ways to increase lumber production.

“Home builders and construction firms that have signed fixed-price contracts are forced to absorb these crippling increases in materials prices and costly delays in deliveries; there is a significant risk that many of these firms will be forced out of business,” the letter, dated March 12, went on to say.

The home building groups blamed the price increase on the “better-than-expected housing demand” during the pandemic and “unprecedented activity by the do-it-yourself segment.”

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‘Unprecedented’ Lumber Prices Add $25k To New Home Cost