NAHB Spearheads Coalition Effort on Lumber

Filed in Advocacy, Material Costs by on March 12, 2021

rising lumber pricesIn an effort led by NAHB, more than 35 organizations today sent a letter to Commerce Secretary Gina Raimondo urging the secretary to turn her “immediate attention to an issue threatening the economic recovery and housing affordability: the price of lumber. We respectfully request that your office examine the lumber supply chain, identify the causes for high prices and supply constraints, and seek immediate remedies that will increase production.”

Adding further urgency to this matter, the letter stated that lumber prices have nearly tripled, and oriented strand board (OSB) prices are up more than 250% since last spring.

“These spikes have caused the cost of building an average new single-family home to increase by more than $24,000 since mid-April 2020 according to the National Association of Home Builders standard estimates of lumber used to build the average home,” the letter stated. “Similarly, the cost of the average new multifamily unit has increased by $9,000 over the same period due to the surge in lumber prices. Additionally, lumber and engineered wood products such as OSB are a large and important component of residential and commercial remodeling projects, such as hospitals, schools, offices and restaurants.”

Secretary Raimondo was told that home builders and construction firms that have signed fixed-price contracts are forced to absorb these crippling increases in materials prices and costly delays in deliveries.

“There is a significant risk that many of these firms will be forced out of business,” the letter stated. “To the extent they are able to pass on their additional costs, both single- and multifamily housing becomes less affordable. Other projects will no longer be economically viable, which undercuts the availability of new housing supply and further jeopardizes affordability.”

The broad business coalition urged the Commerce secretary to undertake a thorough examination of the lumber supply chain and seek remedies that will increase production.

View the full letter, with a list of participating organizations, here.

For more information, contact Alex Strong.

Tags: , ,

Comments (14)

Trackback URL | Comments RSS Feed

  1. David G. Brown says:

    I would suggest you leave the federal government out of meddling with lumber prices. That is unless you want them meddling with housing prices. Maybe the federal government should investigate why when, according to the graph of lumber prices noted to the left in this article, builder’s didn’t decrease housing prices?

    • Chris says:

      As a builder I can answer your question. The reason builders didn’t decrease prices is because the left side of the graph shows where lumber prices were pretty much normal for a very long time. Not until lumber shot up in July and August of last year did builders (at least here in the Northeast) start raising their prices to cover the increase. And, those of us that had contracts that we committed to were substantially hit hard. Case in point – the rise in lumber and lumber related items put us $29,000 OVER budget on a $380,000 home. That’s 75% loss in profit.

    • John Donlin says:

      The government is restricting supply, forcing the lumber industry to import our needs. More timber is lost to wildfires than we used to harvest. Forestry management? I don’t think so.

  2. Jeff Girard says:

    A good start would be to remove duties on imported lumber from Canada!

  3. Harvey Ray Burch says:

    why not get US sawmills back up and running instead of relying on Canada

  4. Fred Reiten says:

    In our local area here in Western Washington, a large truss manufacturer is trying to get permits to build another plant but government regulations have them tied up in the permitting process. Environmental studies, meeting UN Agenda 21 guidelines. Been almost 2 years now. Government is not the solution to the problems government is the problem. Lets go back to 1990 regulations and try this again.
    We need more mills in the us so we are not dependent on foreign lumber. Again environmental restrictions are at the root of this mess. We can do this without hurting the environment.

  5. Scott Crook says:

    The government already has a huge influence on housing prices. Government regulations and enforcements along with local municipality infrastructure recaptures have caused the price of homes to sky rocket over recent years.
    Not to mention anytime the government plays with interest rates it directly effects housing affordability and pricing. The lumber market is just adding to the struggle. I don’t know why economists have not looked into the possibility of deflation in the housing market when interest rates rise and lumber decreases, a serious problem can be on our hands.