Please ensure Javascript is enabled for purposes of website accessibility
Skyrocketing Lumber Prices Could Add $24K to Home Buys. Costa Fires off Letter to Pres. Biden
TLBBHMAP3-U010ALB5ANM-348f959abae2-512-300x300-1
By Jim Jakobs, Digital Producer
Published 4 years ago on
March 8, 2021

Share

Shortages of lumber have nearly tripled the price of lumber since mid-April 2020, according to the National Association of Home Builders.

The association estimates the price of a new single-family home will increase by more than $24,000 as a result. CNBC reports softwood lumber prices are now about 112% higher than they were a year ago.

Reps. Jim Costa, D-Fresno, and Jodey Arrington, R-Texas, sent a letter to President Joe Biden and the Department of Justice on March 4 urging the administration to respond to rising building materials prices and supply shortages.

So far, the trickle-down of high prices isn’t manifesting itself in the Central Valley. At least not yet.

Mike Prandini, president and CEO of the Building Industry Association of Fresno and Madera Counties, says homebuilders work from pre-existing contracts with lumber suppliers that may soften the blow.

“They’re still working on some supplies that they’ve ordered previously,” Prandini told GV Wire℠ by phone Monday. “But it’ll eventually get into the pricing of new homes and and affect the prices.”

Mike Prandini, Building Industry Association CEO

“They’re still working on some supplies that they’ve ordered previously. But it’ll eventually get into the pricing of new homes and and affect the prices.” — Mike Prandini, president and CEO of the Building Industry Association of Fresno and Madera Counties

Boosting Sawmill Activity

Costa and Arrington stressed the need to boost sawmill activity in their letter to Biden and the Justice Department.

“Unfortunately, this unprecedented price increase on new homeowners, as well as homebuilders, will persist until new sawmills come online and current mills re-open and operate at full capacity,” the letter stated. “To address this issue, we ask your Administration to facilitate a discussion with all stakeholders, including sawmills, homebuilders, loggers, and distributors, to ensure all needs are met in a timely manner.”

Housing Starts and Home Remodeling

Increased demand for single-family housing, much of it driven by the coronavirus pandemic, has housing starts up 30% year over year, according to the U.S. Census. That is part of the issue on the demand side.

There has also been a surge in home remodeling, as people sit at home longer and put money they would have spent on going out or traveling into their houses and properties.

Low interest rates are also playing into lumber prices, heating demand for housing and giving builders more incentive to increase production.

“It’s also worth noting, that durable goods are continuing to increase, as individuals are buying large appliances and furniture. This is also helping increase lumber prices because a lot of these items are shipped on wooden pallets,” Joe Sanderson, managing director of natural resources at Domain Timber Advisors, an Atlanta-based timberland investment management organization, told CNBC.

2020 Market Misread

Mill operators and lumber dealers misread the 2020 market. Since housing starts and remodeling were weaker in 2019, they pulled back on production. The expectation was that 2020 would be much of the same.

“COVID hits and they get really, really scared. You saw construction curtailments across the board,” said Paul Jannke, principal at Forest Economic Advisors.

Then came the totally unexpected boom. Housing turned out to be one of the brightest spots in the economic recovery, with demand coming back swiftly.

[activecampaign form=25]

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Paul Atkins Sworn in as US SEC Chair

DON'T MISS

UnitedHealth Spent $1.7 Million on Executive Security in 2024, Filing Shows

DON'T MISS

US Supreme Court Appears Likely to Uphold Obamacare’s Preventive Care Coverage Mandate

DON'T MISS

Woman in Fresno Mansion Fraud Case Sentenced to Prison for Tax Evasion

DON'T MISS

California Prisoner Indicted for Exploiting Child Victim While Incarcerated

DON'T MISS

Kennedy Plans to Phase Out 8 Commonly Used Food Dyes

DON'T MISS

The Superintendent Search Document FUSD Does Not Want You to See

DON'T MISS

Trump Approval Rating Dips. Many Wary of His Wielding of Power, Reuters/Ipsos Poll Finds

DON'T MISS

Fresno Woman, Tied to Fentanyl ‘M30 King,’ Sentenced to Federal Prison

DON'T MISS

Tesla Settles Wrongful Death Lawsuit Claiming Sudden Acceleration in Ohio Crash

UP NEXT

Woman in Fresno Mansion Fraud Case Sentenced to Prison for Tax Evasion

UP NEXT

Trump Is Dismantling the Education Dept. How That Might Harm Special Ed

UP NEXT

Special Interests Pour More Than Half a Billion Into CA Lobbying

UP NEXT

Fresno Barbershop Shooting Leaves Man Dead, Two Others Injured

UP NEXT

Valley Crime Stoppers’ Most Wanted Person of the Day: Satbir Singh

UP NEXT

Steeply Discounted OD-Reversal Medicine Now Available to Any Californian

UP NEXT

Merced College Breaks Ground on $21 Million Center Geared for Tomorrow’s Ag Jobs

UP NEXT

Fresno Police Arrest 11 for DUI During Weekend Enforcement

UP NEXT

One Man Dead After Kings River Rescue Attempt in Fresno County

UP NEXT

Fresno County Will Sell Naming Rights for Clovis and Reedley Libraries

Woman in Fresno Mansion Fraud Case Sentenced to Prison for Tax Evasion

9 hours ago

California Prisoner Indicted for Exploiting Child Victim While Incarcerated

9 hours ago

Kennedy Plans to Phase Out 8 Commonly Used Food Dyes

9 hours ago

The Superintendent Search Document FUSD Does Not Want You to See

9 hours ago

Trump Approval Rating Dips. Many Wary of His Wielding of Power, Reuters/Ipsos Poll Finds

9 hours ago

Fresno Woman, Tied to Fentanyl ‘M30 King,’ Sentenced to Federal Prison

10 hours ago

Tesla Settles Wrongful Death Lawsuit Claiming Sudden Acceleration in Ohio Crash

10 hours ago

Trump Is Dismantling the Education Dept. How That Might Harm Special Ed

10 hours ago

Special Interests Pour More Than Half a Billion Into CA Lobbying

11 hours ago

Texas Walmart Shooter Who Killed 23 Avoids Death Penalty by Pleading Guilty

11 hours ago

Paul Atkins Sworn in as US SEC Chair

WASHINGTON (Reuters) – Paul Atkins, who previously served as a U.S. Securities and Exchange Commission member from 2002 to 2008 and wa...

7 hours ago

CEO of Patomak Global Partners Paul Atkins takes part in a strategic and policy CEO discussion with U.S. President Donald Trump in the Eisenhower Execution Office Building in Washington, U.S., April 11, 2017. (REUTERS/Joshua Roberts/File Photo)
7 hours ago

Paul Atkins Sworn in as US SEC Chair

The corporate logo of the UnitedHealth Group appears on the side of one of their office buildings in Santa Ana, California, U.S., April 13, 2020. (REUTERS/Mike Blake)
7 hours ago

UnitedHealth Spent $1.7 Million on Executive Security in 2024, Filing Shows

9 hours ago

US Supreme Court Appears Likely to Uphold Obamacare’s Preventive Care Coverage Mandate

Pilar Rose, 51, formerly of Fresno, pleaded guilty to tax evasion and obstructing an IRS audit, agreeing to forfeit her mansion and BMW after falsifying financial records to evade taxes and secure fraudulent loans. (Zillow)
9 hours ago

Woman in Fresno Mansion Fraud Case Sentenced to Prison for Tax Evasion

Nathaniel Ray Diaz, 21, of Greenfield, is a California state prisoner who has been indicted on federal charges on Monday, April 21, 2025, for allegedly directing a minor to send sexually explicit images while serving time for previous offenses against the same child. (Shutterstock)
9 hours ago

California Prisoner Indicted for Exploiting Child Victim While Incarcerated

Health and Human Services Secretary Robert F. Kennedy Jr. speaks at a news conference about the Centers for Disease Control and Prevention’s latest autism survey in Washington, April 16, 2025. In his first attempt to significantly change the nation’s food supply, Kennedy will direct food manufacturers to phase out eight petroleum-based food dyes that are found in hundreds of thousands of grocery-store staples, the department said on Monday, April 21. (Pete Kiehart/The New York Times)
9 hours ago

Kennedy Plans to Phase Out 8 Commonly Used Food Dyes

9 hours ago

The Superintendent Search Document FUSD Does Not Want You to See

President Donald Trump attends the annual White House Easter Egg Roll, on the South Lawn of the White House in Washington, D.C., U.S., April 21, 2025. (REUTERS/Leah Millis)
9 hours ago

Trump Approval Rating Dips. Many Wary of His Wielding of Power, Reuters/Ipsos Poll Finds

Help continue the work that gets you the news that matters most.

Search

Send this to a friend