MOBILE, Ala. ( WKRG) — Maybe you’ve been to your local lumber yard or big box store lately and needed some plywood or 2×4’s for a project. Then you realized you were going to end up paying as much as three or four times what you paid for material during your last project.
Multiply that increased cost for those that use lumber on a bigger scale and suddenly there are serious problems.
Courtney Rouse-Heinz is in the home building business with Habitat for Humanity. She says they currently have three builds going on and some roofing projects. Delaying those projects because of high lumber costs is not much of an option.
Lumber prices actually began increasing as far back as 2018 due to various factors, according to the National Association of Home Builders. But in 2020, with new demand partly due to the coronavirus pandemic, the cost continued to escalate. This year, many people began paying attention.
Rouse-Heinz told us, “It’s gotten worse, especially toward the spring when a lot of people start building, and like I said it keeps increasing. So we don’t see any signs right now that it’s even slowing down so that’s very concerning.”
One house Habitat is building in the Hillsdale neighborhood of Mobile is costing the organization twice as much as similar homes built last year.
“I looked at the numbers before I came out here just to make sure,” she said. “Which is kind of sad, but yes it has actually doubled since the last house we put together last year.”
You can call it ‘sticker shock.’ That’s especially true for those who depend on building for a living–like carpenter Tony Causey, who has been watching the price of plywood.
“Like some of it they got in here right now, it’s $55 and it used to be around $32 dollars or $35 dollars, and it slowly went on up.
On average, the NAHB says the soaring prices have added $36k to the cost of building a single-family home. What’s causing the surge in lumber prices is simple supply and demand. Even before the pandemic, lumber prices were rising. But when sawmills and lumber producers had to cut back and lay off workers as the pandemic sped across the country, the supply got smaller, but the demand increased.
Today’s Homeowner host Danny Lipford has been keeping an eye on the situation.
“The low interest rates are driving a lot of construction,” said Lipford. “And it doesn’t change overnight with a lot of the contractors backing off on building homes but the demand is there more than ever again because of that low interest rate, they’re really challenged to move forward.
Lipford says about twenty percent of contractors who build new homes are pouring slabs, but not framing homes yet, in hopes the price of lumber starts to come back down. And that could be a while.
Lipford said, “But, I’m always an optimist and I feel like it’s going to adjust itself slowly–but I think over the next few months we’ll start seeing it peak and start dropping back down—at least we all hope so.”
And it’s not only the price of lumber that’s rising. Every commodity used in the home building industry is seeing a jump in prices, from shingles to bricks to concrete.