After dominating the news cycle for the past year, record-high lumber prices have started to see a reprieve in recent weeks. But while prices have slipped about 40% from the all-time highs seen in May, as of July 1, they were still more than 160% higher than in July 2020. Other building materials like steel, concrete and gypsum have also risen exponentially over the past year and show no signs of easing.
Lumber prices decline
Economists at the National Association of Home Builders (NAHB) caution that while prices for lumber have dipped, it’s still too early to celebrate. Last November lumber prices fell quickly off their summer peak only to abruptly reverse course, soaring to new heights. One factor in the recent decline is that demand has fallen to meet the sparse supply, instead of supply rising to meet demand.
NAHB has developed long and short-term strategies to address the lumber price crisis and other supply issues that have slowed home building and remodeling this past year. Targeted grassroots advocacy, focused communication with key stakeholders, ongoing economic research, and outreach to the Biden administration and Congress have all helped spotlight the issue.
But our work is far from over. The latest price index from the Bureau of Labor Statistics showed prices for goods used in residential construction have increased 16.5% in the past 12 months and have declined just twice since December 2019. Prices paid for gypsum alone have increased 14.6% in a year.
Supply chain issues still abound
Material prices and availability, the cost of regulation, the shortage of construction labor and a limited supply of housing are all hurting housing affordability—a top priority for me as NAHB Chairman. NAHB will continue to pressure policymakers to improve supply chains for all building materials in order to protect housing affordability.
NAHB has been focused on this issue for almost a full year. We are the leader in educating the public and policymakers about how rising lumber and material prices are harming remodelers, homeowners, and national economic recovery. Thanks to NAHB’s grassroots efforts, several House and Senate leaders have openly raised the issue of soaring lumber prices and housing affordability with Commerce Secretary Raimondo and U.S. Trade Representative Katherine Tai. We are awaiting word from Secretary Raimondo on a special summit to address the issue with stakeholders.
We simply won’t let up until the material supply crisis is resolved.
Keep up with our latest efforts to address rising material costs, information on alternative building materials and methods, and ideas to help keep your business running smoothly at nahb.org.