How Rising Lumber Costs Are Affecting Our Housing Market

Written by Rory Burkhart

How Rising Lumber Costs Are Affecting Our Housing Market header image.

Here’s how high lumber costs are affecting our market.

Lumber prices skyrocketed over the last 18 months, and it’s had a massive ripple effect on the real estate market. Since 2020, lumber prices have almost tripled, and the cost of new construction has gone through the roof as a result.

Builders are remaining optimistic, and lumber prices are expected to go back to normal as supply chains continue to open up.

For example, OSB sheathing used in home construction has gone from $7 per sheet to $55. Essentially, it can cost an extra $40,000 to build a house. These rising costs of lumber are all due to supply chain disruption, which occurred due to the pandemic and a lack of supply. On top of high costs, delivery of materials is taking much longer and causing home construction to lag behind. This lack of new home inventory has put more strain on the supply of resale homes, which is why there are so few properties on the market.

Builders are remaining optimistic, and lumber prices are expected to go back to normal as supply chains continue to open up. Within the next 30 to 60 days, we should start seeing declining lumber costs; however, they may still be around double the price of what they were a year ago. If you have any questions about this or other topics relating to real estate, don't hesitate to reach out to us. We'd be glad to help.