It's amazing how suppliers, off-site construction factories, builders and new home buyers have simply thrown in the towel after being hit week after week with rapidly rising lumber and building material prices.
As of the week of March 11, the price of lumber per thousand board feet was at $1,044, according to Random Lengths. That's an all-time high, and up 188% since the onset of the pandemic.
The National Association of Home Builders calculates that current lumber prices are adding at least $24,000 to the price tag of a typical new single-family home.
This price shock is a classic example of the supply and demand curve. On one hand supply has fallen as a result of COVID-19 restrictions hampering sawmills, while quarantining Americans pursuing home renovations or do-it-yourself projects increase the demand for timber. The matter is made worse by low interest rates and tight existing home inventory which has caused new home builders to ramp up production. The demand for new homes is so high that even during an economic crisis we hit a 14-year high in new housing starts in December.
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