It’s safe to say the coronavirus pandemic has had a significant impact across the board. While the demand for new home construction and remodeling has increased since March, it does pose some challenges. Many industries, including the construction industry, have faced labor shortages and disruptions in the supply chain. In addition, lumber prices have increased drastically. Since mid-April, the cost of lumber increased by 120%.
What’s Causing Lumber Prices to Spike?
Simply put, the demand for construction has caused a lumber shortage. Because the demand is high and supplies are low, prices have increased drastically.
In mid-September, framing lumber prices hit an all-time high at above $950 per thousand board feet. Since then, prices have begun to decline — but at a very slow pace. On October 16th, lumber prices still stood above $750 per thousand board feet.
According to NAHB Now, this decline coincides with actions recently taken by the National Associaton of Home Builders (NAHB). The organization has taken steps to call attention to “the impact that soaring lumber prices are having on the housing industry and to press for immediate action.”
What Should New Home Buyers Expect?
While NAHB is advocating for solutions that adequately address the high cost of lumber and supply shortages, it may take some time for things to get back to where they were pre-pandemic. So, it’s important to plan and prepare for its impact. For example, new builds may experience completion delays due to supply chain issues. When it comes to making selections, try to be flexible and choose materials that are readily available.
Despite the challenges presented, it’s not all bad news. As noted above, lumber prices have begun trending downward. What’s more, historically low interest rates have helped to offset increase lumber costs and many lenders are offering to lock in rates for up to a year.
When you’re ready to get started planning and building your own custom home, get in touch with Regency Homes. Our team of knowledgeable experts will be happy to tell you about our floor plans and the communities we build in, as well as answer any questions you may have.
