Construction Rising Lumber Costs

3 Replies

At the beginning of this year my partner and we’re considering building new houses due to the short supply of distressed properties in our market. Since then lumber prices alone are adding $24,000 to the cost of a typical single family home. This will continue to pressure affordability and discourage new home development at a time of record demand. Existing homes are appreciating at a rate reminiscent of the early 2000’s. When will rising costs slow the demand and to what extent? Share your thoughts.

2x4 went up another $1.00 last week.   Gas prices have gone up $1.00 a gallon since new election !!!

I really think things are going to change in construction shortly.

It hasn't slowed down in Phoenix and surrounding cities here thought.

Hammers flying everywhere.

1200 houses going up 800 yards north of us in San Tan Valley.

Have to buy fencing for two jobs and can't believe those prices, doubled in 6 months!

Investors / Home buyers  will just need to pay for the increase!

Had to basically give them labor bids and they pay the material as needed.

When it comes to lumber, owner looks at the receipt and takes another 20 seconds

Then I explain  ,  "welcome to the new world of lumber prices".

I have heard there are several options with "cement, plastic, cast walls"  

right around the corner!

Then watch lumber prices go the other direction!!

Great subject Mike

@Mike Terry When the music stops. Easy debt equals the ability to pay the rising home prices. As soon as rates rise, or more importantly, as soon as the government can no longer "suppress" the rising inflation. I expect once the stocks stop getting injected with printed capital, stocks will fall and the economy will enter a recession. Ultimately, conditions will invert like a normal cycle. However, if capital is able to continue to be printed and injected into the economy, it could go on for a bit. 

A lot of factors are creating some very unusual circumstances. There is no classic boom bust model for what is going on because the last pandemic was in 1918 and that was during a world war with a very different global economy based on Imperialism. The best assumption is to assume nothing and plan projects based on very short time frames and build in larger contingencies.