Surging lumber prices put buying a home out of reach for many Americans
The price of lumber in the U.S. has tripled during the coronavirus pandemic, adding thousands of dollars to the cost of a new house.
Framing lumber was priced at $1,200 per thousand board feet as of late April, a 250% increase from the year-ago period when the price was about $350, according to an analysis from the National Association of Home Builders (NAHB). For house hunters, that adds an average of nearly $36,000 to the price of a home, the trade group said.
"Right now I can't tell anybody how much a house is going to cost," Alicia Huey, a homebuilder in Alabama, told CBS News correspondent Mireya Villarreal.
Paul Jannke, an economist with Forest Economic Advisors who specializes in lumber markets, said prices are rising because of strong demand for wood. Homeowners, stuck indoors during the pandemic, have recently been buying up lumber to complete renovations or additions on their house, Jannke told Villarreal.
Another factor pushing up lumber costs is that more Americans are leaving big cities and buying new homes in the suburbs, he said.
Permits for new home construction have grown nationwide this year, according to U.S. Commerce Department data.
Chuck Fowke, a homebuilder in Florida and chairman of the NAHB, thinks the cost of lumber is worrisome enough to warrant government intervention.
"These lumber price hikes are clearly unsustainable," Fowke said in a statement. "Policymakers need to examine the lumber supply chain, identify the causes for high prices and supply constraints, and seek immediate remedies that will increase production."
Rising costs for homebuilders are holding back production, according to Bank of America. The lender also noted in a new report that a gauge of homebuyer sentiment has fallen to its lowest level since 1982, in part due to sharply rising prices.
