HOUSTON – Homebuyers, builders, and even DIYers are shocked and stuck with crazy-high lumber prices. The price of lumber has increased about 180% since last year.
Some consumers received the bad news after their new homes were already under construction. The builder told them they wouldn’t be able to honor the original sales price they agreed on because lumber prices have gone up so much. This is impacting anyone who needs wood for anything from a new fence or deck to a house.
“The homes that we’re building now are from the 300s to the 350s,” said Johnny Hollins of JG Hollins Builders. “Last year, before we started the development, we were gonna sell those houses for around $275,000 to $290,000.”
Hollins says most new home prices are going up by $30,000 to $40,000 to help builders cover the cost of lumber. There are several reasons for the increase.
Lumber yards shut down for months at the start of the pandemic. At the time, developers weren’t ordering lumber because they anticipated that home sales would also slow. Instead, sales increased.
“Once the demand picked up, we had a three or four-month period where we were not working or not producing material,” explained Hollins.
Other factors driving up the cost of lumber include labor shortages at lumber mills and a beetle plague infecting forests in Canada.
“We’ve been finding other ways to cut back,” Hollins said. “We’ve been doing a lot of things in-house now, which requires more of me out in the field. Cutting back on labor prices in order to bring a product to market that potential buyers can afford.”
When lumber prices will level out is anyone’s guess.
“From what I can tell, we’re gonna be in this for a while,” said Hollins.
If you’re looking to buy a new home, you can always wait it out. Maybe the prices will go back down. You also risk interest rates going back up and missing out on a lower mortgage rate. Certainly, if it’s a home improvement project you’re looking to do, if it can wait, you should do that to try and save some money.