Despite the current lower lumber prices, builders nationwide are still forced to raise new home construction prices due to the high demand for housing and economic inflation, which has caused supply shortages and elevated building material prices.
According to the National Association of Home Builders, the cost of lumber added $35,872 to the cost of a new single-family home back in April. Now that lumber prices are lower, the association estimates new homes cost $29,833 more — only a $6,039 decrease.
Why not a significant difference? While lumber costs are currently lower, they are still volatile and expected to remain well above its pre-pandemic range. Other building materials, such as plywood, OSB, particleboard, fiberboard, etc., have also significantly increased, ultimately keeping prices up. For example, OSB prices have skyrocketed more than 500% since January 2020. Regulatory costs are also a factor that increase a homebuyer’s price outside of the builder’s control. Not to mention, the supply shortage of material changes weekly and is causing other issues, such as building delays.
At Landmark Homes, we have been heartbroken by the unforeseen material shortages and price increases and the effects it has had on our homebuyers. Rest assured we are doing everything in our power to mitigate these effects — including offering to sell homes at our cost to those it has affected the most.