High lumber costs are on the rise again after a retreat from mid-September to mid-November that was welcome news to builders. Prices have now increased by nearly 20% over the past four weeks, the National Association of Home Builders reports.
These higher lumber costs have added thousands of dollars to the cost of new single-family homes and apartment dwellings. In August, the trade group reported that new single-family homes had increased by an average of about $14,116 since April 17 and multifamily homes had increased by $5,322 in the same period due to the higher lumber prices. The median sales price of a new home in October was $330,600.
“Indications are that lumber producers are reducing production heading into the slower winter building season, even as new residential construction continues to outpace seasonal norms,” the NAHB reports.
Lumber prices skyrocketed to record highs into September as the pandemic wore on, before gradually starting to fall in October and November.
However, a decrease in tariff prices may offer some relief. Tariffs on shipments of Canadian softwood lumber into the U.S. currently stand at 20% but in mid-December will be reduced to about 9%.
“This is a step in the right direction, as tariffs have contributed to unprecedented price volatility in the lumber market, leading to higher prices and harming housing affordability for American families,” says Chuck Fowke, the NAHB’s chairman. “The United States needs to work with Canadian officials to end the tariffs and achieve a long-term, stable solution in the lumber trade that provides for a consistent and fairly priced lumber supply.”