Lumber prices are through the roof and developers and contractors worry there’s no end in sight

Lumber prices now add $36,000 to a newly built home
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Posted at 6:43 AM, May 11, 2021
and last updated 2021-05-11 06:47:41-04

CLEVELAND — When you’re building a home there are, at times, unforeseen obstacles to overcome. Chad Stone, the owner of Stone’s Construction and Remodeling has made a living dealing with those obstacles. His company specializes in additions and high-end kitchen remodels. But Stone said he’s never seen anything like the current lumber market.

“We’ve had over $1,000,000 in additions put on hold. People are waiting to see if the pricing comes down to a more stable price,” he said.

But the lumber prices haven’t stabilized. According to the National Association of Home Builders, the rise in lumber has added about $36,000 to a newly built home. In May of last year, $50,000 worth of lumber could build about 10 homes, this year, it can build only 2. The price is up more than 300% from last year.

“Every supplier I talked to said, not only, is the cost of goods and woods not going down, but it’s just continuing to go up,” said Stone.

Jeff Everett with Cleveland Lumber said the reason for the price hike is tough to nail down.

“There are tons of variables that I don’t think anybody could necessarily predict,” he said.

He said those variables include tariffs on Canadian lumber, very few sawmills that can meet the demand, a lack of truck drivers to deliver the material and natural disasters like the ice storms in Texas that slowed down production.

He said Cleveland Lumber has had to be strategic about where and when they’re ordering product.

“Because we're a smaller lumber company, we have a little bit of flexibility where we can get it, but we've we've had to get really creative over the last year,” he said. “We're having to explain to people, you know, I'm giving you this price today, new price prices come out in a few days so this could change.”

It’s not just lumber yards or developers feeling the price hike, it’s a trickle-down effect. Greg Platt owns Ornamental Products and Tools and, among other supplies, he sells woodworking machines.

“It’s starting to affect us all. There are good days and bad days but not like it used to be,” said Platt. “You really don’t know what tomorrow is going to bring.”

Stone said he is hopeful lumber prices will level off but will be lucky if he breaks even this year. He knows other companies won’t fare as well.

“People are either going to pay more for work or they’re not going to do it and that’s just the current state of construction right now, and it’s sad but that’s just how it’s going to be. There’s going to be a lot of small businesses that are affected by this to the point of bankruptcy or out of business,” he said.

The industry is calling on the Biden administration to temporarily remove the 9% tariff on Canadian lumber to help the prices stabilize. They’re also hopeful more mills will come back online and ease the supply shortage.