In an effort led by NAHB, more than 35 organizations today sent a letter to Commerce Secretary Gina Raimondo urging the secretary to turn her “immediate attention to an issue threatening the economic recovery and housing affordability: the price of lumber. We respectfully request that your office examine the lumber supply chain, identify the causes for high prices and supply constraints, and seek immediate remedies that will increase production.”
Adding further urgency to this matter, the letter stated that lumber prices have nearly tripled, and oriented strand board (OSB) prices are up more than 250% since last spring.
“These spikes have caused the cost of building an average new single-family home to increase by more than $24,000 since mid-April 2020 according to the National Association of Home Builders standard estimates of lumber used to build the average home,” the letter stated. “Similarly, the cost of the average new multifamily unit has increased by $9,000 over the same period due to the surge in lumber prices. Additionally, lumber and engineered wood products such as OSB are a large and important component of residential and commercial remodeling projects, such as hospitals, schools, offices and restaurants.”
Secretary Raimondo was told that home builders and construction firms that have signed fixed-price contracts are forced to absorb these crippling increases in materials prices and costly delays in deliveries.
“There is a significant risk that many of these firms will be forced out of business,” the letter stated. “To the extent they are able to pass on their additional costs, both single- and multifamily housing becomes less affordable. Other projects will no longer be economically viable, which undercuts the availability of new housing supply and further jeopardizes affordability.”
The broad business coalition urged the Commerce secretary to undertake a thorough examination of the lumber supply chain and seek remedies that will increase production.
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