AMARILLO, Texas (KFDA) - Soaring lumber prices are reportedly adding over $20,000 to the price tag of a new home.
At the beginning of the pandemic many home builders thought the market would slow down, but with low interest rates, it did quite the opposite.
Now home builders are trying to keep up with demand but facing material shortage.
The “Lumber crisis” as one of the home builders I spoke with called it, is essentially at the center of this issue.
When COVID-19 hit, like many other places, lumber mills closed down.
So, now there isn’t enough to keep up with demand, leading to the insane prices we are seeing. Right now, lumber cost twice as much as it did around this time last year.
“As far as lumber pricing and if we have ever seen it be this high, absolutely not,” said Raymond Roberts, the owner of Wyben Homes.
In the last 10 months Roberts has seen the price per foot of a home increase anywhere from $10 to $20 per foot.
That additional cost is affecting the plans of home buyers and home builders.
“Just recently, this week, I have lost two sales directly related to the cost that are incurred for construction.” said Roberts.
He says himself and other contractors have tried to absorb some of the cost increases but can only do so much.
For many buyers, the added 20 to 25 thousand dollars is a deal breaker. But, even for those who it isn’t, the material just is just not there.
“As much as it is skyrocketing in price, we are getting to the point where lumber is going to be very very difficult to come by for an unforeseen amount of time. Which I think is going to just decline our sale because we are not going to be able to quit frankly be able to build houses.” said Roberts.
This issue is not just affecting contractors at the local level.
Contractors across the nation who are part of the Associated General Contractors of America are also following this situation.
“Left unchecked, these rising material prices threaten to undermine the economic recovery by inflating cost of infrastructure and economic development projects,” said Stephen E. Sandherr, the chief executive officer for the Associated General Contractors of America.