Originally published by the National Association of Home Builders – August 21, 2020
According to the National Association of Home Builders’s (NAHB) standard estimates of lumber used to build the average home, the recent spike in softwood lumber prices has caused the price of an average new single-family home to increase by $14,116 since April 17.
Similarly, the market value of the average new multifamily home has increased by $5,322 over the same period due to the surge in lumber prices.
These estimates are based on the softwood lumber that goes into the average new home, as captured in the Builder Practices Survey conducted by Home Innovation Research Labs. Included is any softwood used in structural framing (including beams, joists, headers, rafters and trusses) sheathing, flooring and underlayment, interior wall and ceiling finishing, cabinets, doors, windows, roofing, siding, soffit and fascia, and exterior features such as garages, porches, decks, railing, fences and landscape walls.
The softwood products considered include lumber of various dimensions (including any that may be appearance grade or pressure treated for outdoor use), plywood, OSB, particleboard, fiberboard, shakes and shingles—in short, any of the products sold by U.S. sawmills and tracked on a weekly basis by Random Lengths.
Based on NAHB’s standard priced-out calculations, a $14,116 increase in the median new home price will price more than 2.1 million U.S. households out of the market, meaning that these households could qualify for a mortgage to buy the median-priced new before home the price increase, but not afterwards.
Study: Cost of Steel v. Wood
A recent study sponsored by the Steel Framing Industry Association (SFIA), “Costs to Build with Cold-Formed Steel Versus a Wood-Framed Building,” addresses framing costs on behalf of architects, building owners, and general contractors.
While the research was completed before the current spike in wood prices, “Costs to Build” establishes that CFS framing and wood framing costs in mid-rise structures are essentially the same, when construction insurance premiums associated with using the selected material are included.
Of course, the current skyrocketing prices of lumber make CFS framing the clear favorite from a pricing point of view right now.
Therefore, SFIA gathered pricing information and has issued a bulletin associated with the “Costs to Build” report.