Higher Lumber Prices Could Slow Housing Growth

Since mid-April 2020, the average lumber prices have surged an amazing 80%. Moving from a low of $348 per thousand board feet (MBM) to $ 627 MBM as of July 31st. The National Association of Home Builders (NAHB) chief economist Robert Dietz said in prepared remarks that Average lumber prices have surged 80% since mid-April 2020, moving from a low of $348 per thousand board feet to $627 per thousand board feet as of July 31. According to NAHB chief economist Robert Dietz, this meteoric rise in lumber prices will add “thousands” to the cost of a newly built home, constrain new housing supply, and reduce affordability for new home buyers. At the same time, demand for single-family homes has risen, the result of the COVID-19 pandemic. New single-family home sales increased 14% in June to an annualized pace of 776,000 per year. New-home sales are up 3% in the first half of 2020, compared with the first half of 2019, while inventory sits at only a 4.7-month supply.