SEATTLE (Scrap Monster): A recent research report published by the Bank of America (BofA) indicates that escalating lumber prices have lifted home prices significantly. The report cites, among other things, tight lumber market supply and rising home construction costs.
The report notes that the spike in lumber prices in 2021 has driven housing prices even higher. Over the one-year period from April 2020 to April this year, the total cost of lumber and manufactured lumber products for single family home has skyrocketed by almost 184% to $48,316. The rise in lumber and related materials has added nearly $34,000 to the price of a new home, it said.
Meantime, the continuous rise in lumber prices has badly impacted construction companies across the country. These companies are said to be seeking alternative options, such as switching to concrete and steel structures, although their prices too have gone up, but not as sharply as those of lumber. Incidentally, the per board foot prices of lumber at the mill have skyrocketed by nearly five times, as compared with levels in 2019.
The demand for housing has surged higher significantly in the months following the onset of the pandemic. The home sales had touched its peak in October last year.
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