NAHB works to address rising lumber prices
June 4, 2021
Lumber prices have more than quadrupled since April 2020 and this has caused the price of an average new single-family home to increase by $35,872, according to a recent report by the National Association of Home Builders (NAHB) economics team.
Skyrocketing lumber prices have added nearly $13,000 to the market value of an average new multifamily home, which translates into households paying $119 a month more to rent a new apartment.
In a recent report to NAHB state representatives, including Washington’s state rep Nick Scheel, the association shared its continued work with the White House, Congress and lumber producers to increase production and bring prices lower.
NAHB Senior Officers gain support from Commerce Secretary
In a May 28 meeting with NAHB Senior Officers, Commerce Secretary Gina Raimondo pledged the full support of the Biden administration to resolve the lumber crisis.
Raimondo pledged to work with all stakeholders to “identify targeted actions the government or industry can take to address supply chain constraints.”
Congressional support grows
NAHB Chairman Chuck Fowke and First Vice Chairman Jerry Konter held in-person and virtual meetings with congressional leaders in mid-April to urge them to address rising lumber prices and to take steps to ensure an adequate supply of lumber and other building materials to stem rising housing costs.
House and Senate lawmakers are calling for action on the lumber front and U.S. Trade Representative Katherine Tai recently told lawmakers that she would “push for solutions to the lumber pricing issues.”
From coast-to-coast, NAHB members supported Bringing Housing Home by holding more than 140 in-district meetings with their lawmakers to seek action on the lumber price crisis.
What’s behind soaring lumber prices?
NAHB reports these unprecedented lumber price hikes can be attributed to several things:
- Many mills reduced production last spring due to stay-at-home orders and social distancing measures enacted by state and local governments at the onset of the coronavirus pandemic.
- When it became clear in the ensuing months that housing weathered the storm much better than predicted and demand remained strong, lumber mills did not ramp up production accordingly.
- Moreover, producers did not anticipate the massive uptick in demand from do-it-yourselfers and big-box retailers during the pandemic.
- Finally, the extreme lumber price volatility has been exacerbated by tariffs on Canadian lumber imports into the U.S. market.
Other NAHB Actions
In addition to the items above, NAHB has taken the following actions since President Biden was sworn into office in January and the new 117th Congress was seated:
- In an effort led by NAHB, more than 35 organizations sent a joint letter to Commerce Secretary Gina Raimondo calling on her to “examine the lumber supply chain, identify the causes for high prices and supply constraints, and seek immediate remedies that will increase production.”
- NAHB has also sent letters to President Biden, Agriculture Secretary Tom Vilsack, S. Forest Service Chief Victoria Christiansen and U.S. Trade Representative Katherine Tai seeking prompt action to address this issue that is a growing threat to housing and the economy.
- NAHB remains in close contact with the administration and held a productive virtual meeting on the lumber situation with White House staff from the Domestic Policy Council, National Economic Council and Office of the Vice President on April 29.
- At the same time, NAHB continues to reach out to lumber producers, other policymakers and the media calling on lumber mills to increase production to meet growing housing demand. NAHB CEO Jerry Howard delivered this message in several appearances on Fox Business Network and Fortune, Bloomberg, The Washington Post, The Wall Street Journal, Fox Business online and the Associated Press have mentioned or quoted NAHB on the impact of rising lumber prices.
- Woodworking Network on April 30 published a sharp rebuttal by NAHB that undercuts arguments from the U.S. Lumber Coalition on lumber prices and import duties.
- NAHB is also seeking swift action on the trade front. Tariffs on Canadian lumber shipments into the U.S. are exacerbating price volatility and increasing housing costs.
- In the near term, NAHB invites builders to take advantage of this free sample escalation clause to use in contracts which stipulates that if lumber prices increase by a certain percentage, the customer would be required to pay the extra cost.
- The NAHB advocacy team – Government Affairs, Communications, Economics and Legal – continues to work doggedly on all fronts to find solutions that will ensure a lasting and stable supply of lumber for the home building industry at a competitive price.
Webinar series to focus on navigating lumber, supply chain challenges
Earlier this month, NAHB announced it is hosting a webinar series starting June 8 to help members and other industry professionals understand the current challenges with escalating lumber prices and supply chain issues. The series will also teach how to develop strategies to adapt to this rising cost environment.
While NAHB continues its work on policy solutions, these sessions will help builders take action now to manage the impact.
The webinars are free for NAHB members, and replays will be available for all registrants.
- The State of the Residential Construction Supply Chain (Tuesday, June 8, 11 a.m. – 12:15 p.m. PDT)
- Trim the Fat: Saving Materials, Dollars & Time When You Design & Build (Thursday, June 10, 7 – 8 a.m. PDT)
- Delivering the Dream Despite the Unexpected: Sales & Customer Experience in An Unprecedented Market (Tuesday, June 22, 11 a.m. – 12 p.m. PDT)
- Using Your Contracts to Help Manage Supply Chain Issues (Thursday, June 24, 11 a.m. – 12 p.m. PDT)
- Dynamic Strategic Planning & Budgeting in Uncertain Times (Tuesday, June 29, 11 a.m. – 12 p.m. PDT)
Learn more and register at nahb.org/supplychain.