Senior officers and staff from the National Association of Home Builders (NAHB) recently held a 30-minute virtual meeting with Commerce Secretary Wilbur Ross to discuss problems that escalating lumber prices and supply shortages are having on the housing industry and the overall economic recovery. NAHB chairman Chuck Fowke and second vice chairman Jerry Konter told Ross how higher costs are affecting their businesses, with Konter stating his business is planning for reduced sales due to higher lumber costs.
According to the NAHB, Ross repeatedly acknowledged during the discussion how “critical” housing is to the U.S. economy. Lumber prices have skyrocketed more than 170% since mid-April, according to Random Lengths. As a result, the residential construction industry has absorbed the largest four-month increase in lumber prices since data was first recorded in 1949.
NAHB chief economist Rob Dietz told Ross that the unprecedented lumber price spike has added more than $16,000 to the price of a typical new single-family home and $6,000 to the price of an average new multifamily unit. As a result of lumber price increases, it is becoming more difficult for builders to build homes that are affordable to low- and moderate-income families. Reports from NAHB members suggest the lumber criss is hurting business and impeding an even more robust housing upturn.
Secretary Ross told NAHB leaders that lumber mills are concerned that the ongoing housing upturn is temporary. According to the NAHB, Dietz said the solid housing market is sustainable.
In addition to advocating for domestic producers to increase production, the NAHB has also stressed the importance of returning to discussions with Canada on a new softwood lumber agreement on the current lumber crisis. A new softwood lumber agreement could end tariffs averaging more than 20% on Canadian lumber shipments into the United States.
