Higher material costs and persisting supply chain challenges continue to strain home builders.
The enduring issues brought federal officials and industry stakeholders to the table to discuss possible solutions during the White House Summit on Homebuilding Supply Chain on July 16.
The breakdown:
– Changes in prices for softwood lumber products between April 17, 2020, and July 8, 2021, have added $29,833 to an average new single-family home price, according to the National Association of Home Builders (NAHB).
– The same changes have added $9,990 to an average new multi-family home price tag, translating to households paying an additional $92 a month for apartment rentals.
– The White House virtual summit discussed core challenges across the housing supply chain to help inform possible near- and medium-term efforts to improve housing inventory.
– NAHB stressed the need for lumber mill producers to boost production to meet rising demand.
What this means:
Home builders have shouldered inflated costs of building materials for the past year since the outbreak of COVID-19. That financial burden has trickled down to buyers in the red-hot housing market who have seen substantial surges in costs for new construction.
This White House summit was the product of longstanding efforts by NAHB and housing advocates to educate and influence policymakers to address the sector’s challenges.
“While today’s White House meeting was a step forward, we are not out of the woods yet,” read an NAHB statement following the event. “Looking ahead, we will remain laser-focused on not only lowering lumber prices and increasing supply, but also keeping pressure on policymakers to improve supply chains for all building materials in order to protect housing affordability.”
While lumber prices have started to decline recently, they are still much higher than a year ago, before the boom in home remodeling and an unexpected surge in buyer demand.
NAHB has indicated that the sawmill’s output continues to lag, creating concerns that prices could spike again.
NAHB joined other industry professionals to meet with Secretary of Commerce Gina Raimondo, Secretary of Housing and Urban Development Marcia Fudge, National Economic Council Director Brian Deese and Council of Economic Advisers Chair Cecilia Rouse at the summit.
“The U.S. has a longstanding shortage of affordable housing, and participants discussed how that challenge is being exacerbated by short-term supply chain disruptions across the home building sector, including fluctuations in lumber prices, supply chain disruptions in other critical inputs including resins and engineered wood products, transportation challenges with ports and trucking, and underinvestment in training and skilled workforce development,” read a White House statement following the summit.
Jordan Grice is RISMedia’s associate online editor. Email him your real estate news ideas to jgrice@rismedia.com.
