Soaring lumber prices that have tripled over the past 12 months have caused the price of an average new single-family home to increase by $35,872, according to new analysis by the National Association of Home Builders (NAHB).
Further adding to housing-affordability woes, other building material prices have been steadily rising since 2020 and, like lumber, are in short supply, as well.
“This unprecedented price surge is hurting American home buyers and builders and impeding housing and economic growth,” said NAHB chairman Chuck Fowke, a custom builder from Tampa.
The latest Random Lengths prices as of the week ending on April 23 show the price of framing lumber near $1,200 per thousand board-feet – up nearly 250 percent since last April, when the price was roughly $350 per thousand board-feet.
During this runup, NAHB has been monitoring lumber prices and their effect on the housing market. In February 2021, NAHB reported that rising prices had added $24,000 to the price of a new home. Last August, rising prices resulted in the average price of new single-family homes to increase by $16,000.
NAHB calculated these average home-price increases based on the softwood lumber that goes into the average new home, as captured in the Builder Practices Survey conducted by Home Innovation Research Labs. Included is any softwood used in structural framing (including beams, joists, headers, rafters and trusses), sheathing, flooring and underlayment, interior wall and ceiling finishing, cabinets, doors, windows, roofing, siding, soffit and fascia, and exterior features such as garages, porches, decks, railing, fences and landscape walls.
It is not just the home-purchase sector that is feeling a hit from the price hike of lumber.
The spike also has added nearly $13,000 to the market value of an average new multi-family home, which translates into households paying $119 a month more to rent a new apartment.