Lumber Prices Skyrocket Heading into Home Construction Season
Ada, MN — If you’re planning a home build, renovation, or addition this year, you might get a bit of sticker shock when you get the cost estimate. Lumber prices have skyrocketed over the past year. In fact, according to fortune.com, they are up 188% over last year. Not only are prices high, but supply is low too. Dave Jenson with the Ada Building Center says the major price increase is the result of low interest financing, high demand, and low supply, all as a result of the pandemic.
And while lumber has seen by far the largest increase in costs over the past year, it’s not alone. Jenson says overall they are seeing increases in all building materials.
On average, building supplies have increased 37% since the beginning of the pandemic. The National Association of Home Builders estimates that the current lumber prices themselves is adding at least $24,000 to the price tag of a typical new single-family.
As for when lumber prices will go back down, Jenson believes that the high prices will slow down the market until supply can catch up. The prices will likely stay high, however, until this year’s construction season ends, so it may not be until the end of the year before we see significant drops.