Lumber Prices Double Amid a 12% Decline in Housing Starts
As lumber prices doubled in price, the number of new single-family construction starts dropped dramatically from December numbers. According to Random Length Lumber Futures for March, lumber prices reached $1,004.90 per 1,000 board feet, double the price from three months ago, reports CNBC. The price spikes continue to hurt builders trying to keep up with the demand for newly constructed, affordable homes. January housing starts dropped 12% compared to December, with rising lumber prices likely to blame. But it’s not just lumber, says Robert Dietz, chief economist at the National Association of Home Builders. Many builders are having difficulties obtaining many building materials in a timely fashion.
Dietz also noted that the number of single-family homes permitted but not started jumped 9.6% in December and was 28% higher than a year earlier, as building material cost increases and delays slow some home building.
Executives of some of the nation’s largest public homebuilders have noted on earnings calls that they have slowed production, hoping to wait out some of these higher costs.
Unfortunately, it doesn’t look as if costs are coming down. Several factors should have taken the pressure off prices, but so far have not.