Lumber Prices are Insane, But You Can Still Afford to Buy a New House
Dixey Robertson, Executive Officer with the Home Builders Association of Northwest Louisiana, explains why lumber costs have skyrocketed recently, and how those increased prices are affecting home construction.
"They're sky high. They've tripled in the past twelve months," Robertson says, "The National Association of Home Builders is (that) it's a production problem.
"We kind of had the perfect storm between the COVID pandemic, the projection of the market...production was down because of the COVID shutdown last year, then they also reduced production because they thought demand would drop."
According to Business Insider, lumber prices across the country have increased by more than 250% since this time last year. The National Association of Homebuilders said the bump in cost has added more than $24,000 to the price of an average single-family home.
But Robertson emphasizes that though the cost of building is dramatically higher, those increased prices aren't causing a downturn in the Shreveport - Bossier housing market.
"We haven't felt it yet because interest rates counterbalance it," she says, "Now we are anticipating a problem. Everyone's being very cautious. But we haven't seen a dramatic drop in construction in this market and we're keeping our fingers crossed that we don't."
Robertson then says that is prices continue to rise, there are hopes that there will be intervention at the federal level. "70% of our lumber comes from Canada and tariffs (are in place) to even the playing field for domestic mills. Why production hasn't picked up and why the mills aren't producing more wood is the big question."
"We're hanging in there. Our market's pretty steady," Robertson concludes, talking about ArkLaTex home building in the months ahead, "I don't think we can sustain another increase in pricing if it doesn't level off soon. Interest rate are key. If we didn't have these historical lows we'd be in a pickle."