The National Home Builders Association says increasing prices could cause the average new single-family home to increase by $18,600. Lumber prices hit record highs in May of 2021. During a brief price drop, the construction industry hoped to return to pre-pandemic numbers; unfortunately, costs snapped back up.
According to Random Lengths Lumber, prices hit more than $1,500 per thousand board feet in May. August saw a reduction to $400. However, prices now sit at over $1,000 with no sign of dropping.
"It is a shame because our company prides itself on, and I think we are one of the few players in the industry that caters to that step-up market," said Rino Soave, owner of Infinity Homes in Westland, MI. "Now that same house you could have bought maybe 18 months ago for 220 is now probably close to 280. So it is a big spike. And the fear is the attainability of housing is going to be out of reach for some people."
"Pricing, if you went back a couple of years ago, OSB board was $8-9 a sheet. Over the last few months, it has gone as high as $50 to $55 a sheet," said Sheldon Yellen, CEO of Belfor, a disaster response company. He especially feels the pinch amid recent natural disasters. He estimates a 22% increase in his company's need for building materials.
"I think there is some impact on the amount of work that is going on and required because of whether it is wildfires, hurricanes, tornadoes," said Yellen.
Yellen, Soave, and industry analysts place the bulk of the blame on the pandemic. "I think the supply chain issues and the COVID work stoppages in some of the manufacturing facilities and plants that are producing materials are probably more significant than the actual demand itself," Yellen said.
Yellen advises do-it-yourselfers: "Don't say, 'I will get it as I need it.' You are going to have to put your money out first. You are going to have to stock and inventory a little bit to make sure you can secure the products you need so that each time you get to another phase of construction, you are not forced to stop working."
The recent spike in building materials prices with no sign of slowing causes significant concern throughout the construction industry.