If you've been considering building a new home or putting on an addition you may want to act fast; lumber prices are skyrocketing.
If you’ve been considering building a new home or putting on an addition you may want to act fast; lumber prices are skyrocketing.
While the housing market in the Rochester region has been steady, these major increases could start to slow new construction down.
"This is probably the biggest increase in the shortest period of time we've seen,” says Scott Fields, owner of Matthews and Fields Lumber in Henrietta. He’s talking about timber, the wood needed to build homes.
About 1/3 of it used in homebuilding nationally comes from Canada. “The tariffs have been in place for decades frankly but the current administration raised them to a little over 20-percent,” he adds.
The increase in the tariff was intended to help American mills but combined with an increased demand for wood, "unfortunately, it's only the mills that are benefiting and a few mill workers. The American consumer is really the one loosing because they're paying more for housing," Fields says.
As an example, one train car typically carries enough lumber to build six homes. This time last year, that supply would cost about $60,000. Today, it costs $80,000.
So far, most local builders have been absorbing the increase but that won’t continue, "currently, we still do have a fixed price contract so whatever they contract for is what they pay for. So any lumber increases that happen from when we do contract to when we complete, which could be up to six months later, we absorb that. As of now, with the prices and some of the other things that are happening in the industry we are starting to talk about escalation clauses," says John Graziose, Owner of Geber Homes.
As builders look for less expensive alternatives, many are moving to engineered lumber when it’s an option but even that is going up in price.
Ultimately, the supply costs may prevent some potential buyers from building, “as prices go up three, four, $5,000 that's going to create a smaller pool of buyers for us and less houses will be constructed,” Graziose says.