Stubbornly high lumber prices are harming the housing industry and threatening affordability by adding almost $36,000 to the price of a new home just as the nation seeks to rebound from the pandemic, National Association of Home Builders (NAHB) analysis shows.
As more families spend time at home amid the pandemic, remodelers have seen strong demand for projects, yet lumber shortages and delayed deliveries have added both time and costs. The unprecedented lumber price hikes are attributable to several factors, including reduced production last spring amid stay-at-home orders and social distancing measures enacted by state and local governments at the pandemic’s onset. Housing also fared much better than predicted, and mills did not ramp up production to keep up with the demand.
A National Effort to Reverse Rising Lumber Costs
As lumber prices have climbed with no signs of retreating, NAHB has continued to work to bring them down, a priority for the association. Most recently, NAHB CEO Jerry Howard and senior NAHB staff met virtually with White House staff from the Domestic Policy Council, National Economic Council, and the Office of the Vice President to discuss mill capacity issues and worker shortages. We emphasized how the greatest impact will come from domestic lumber producers and sawmills immediately boosting production to end supply bottlenecks. We also stressed that soaring lumber prices are exacerbating the housing affordability crisis—a key issue for President Biden.
NAHB urged the White House to bring together interested stakeholders for a summit on lumber and building material supply chain issues and to temporarily remove the 9% tariffs on Canadian lumber. A new softwood lumber trade agreement that will be equitable for all parties is an important step to restore lumber price stability.
NAHB at Work to Solve Crisis
The association has worked to address the lumber crisis over the past year by taking several actions, including:
- Reaching out to the Biden administration calling for prompt action on the issue.
- Leading an effort by more than 35 organizations asking Commerce Secretary Gina Raimondo to examine the lumber supply chain and work to increase production.
- Requesting that Congress consider ways to boost the domestic supply of timber from public lands.
- Meeting with members of Congress in their home districts to “Bring Housing Home” and relay the message that high prices are hurting small businesses such as home builders and remodelers.
- Conducting economic research showing the effect soaring prices are having on the cost of a new home.
- Conveying the message to the public through news media outlets, social media, on nahb.org and the NAHBNow blog.
- Targeting advertisements to domestic producers featuring member testimonials on the impact of high prices.
- Urging U.S. trade officials to return to the table and negotiate a new agreement on softwood lumber tariffs with Canada.
The industry is far from out of the woods. The NAHB advocacy team will continue to work hard to find solutions that ensure a lasting and stable supply of lumber is available at a competitive price. Learn more about what NAHB is doing to resolve the lumber crisis at nahb.org/lumber.