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Rising Lumber Prices Could Add More Than $18,600 to New Home Value

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Building Materials

Rising Lumber Prices Could Add More Than $18,600 to New Home Value

Ebbing and flowing lumber prices are disrupting housing affordability once again


January 5, 2022
lumber supply
Image: Stock.adobe.com

After months of fluctuating prices, lumber is a hot commodity yet again with a 167% price increase from late August to December 29, 2021, according to NAHBNow. Soaring rates have nearly tripled over the past four months, causing the price of an average new single-family home to rise by over $18,600. 

Initial lumber price volatility is attributed to slow production during the first months of the COVID-19 pandemic, but the recent upsurge is due to ongoing supply chain disruptions, increased tariffs on Canadian lumber imports into the U.S. market, and a strong wildfire season depleting woodlands in British Columbia and the western U.S.

Over the past four months, lumber prices have nearly tripled, causing the price of an average new single-family home to increase by more than $18,600, according to NAHB standard estimates of lumber used to build the average home. This lumber price hike has also added nearly $7,300 to the market value of the average new multi family home, which translates into households paying $67 a month more to rent a new apartment.

According to Random Lengths, as of Dec. 29, the price of framing lumber topped $1,000 per thousand board feet — a 167% increase since late August.

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