U.S. lumber prices have tripled over the past 12 months, according to the National Association of Home Builders (NAHB).
Covid-19 shutdowns last year reportedly interrupted lumber supplies, causing prices to skyrocket.
Many mills reduced production last spring due to stay-at-home orders and social distancing measures enacted by state and local governments at the onset of the coronavirus pandemic. When it became clear in the ensuing months that housing weathered the storm much better than predicted and demand remained strong, lumber mills did not ramp up production accordingly. Moreover, producers did not anticipate the massive uptick in demand from do-it-yourselfers and big box retailers during the pandemic. Finally, the extreme lumber price volatility has been exacerbated by tariffs on Canadian lumber imports into the U.S. market.National Association of Home Builders
The increase in lumber prices have added nearly $36,000 more to the price of an average new home since last year, according to the NAHB Economics team.
Building material prices have also reportedly been steadily rising since 2020 and were up across the board in March.
Many home builders are incorporating an "escalation clause" in their contracts that require homeowners to pay additional costs if lumber prices increase more than a certain percentage while building their home.
The NAHB says is it working doggedly on all fronts to find solutions to ensure a lasting and stable supply of lumber for the home building industry at a competitive price.
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