It’s not just lumber. The rapidly rising prices for other heavily relied upon building materials are causing widespread concerns throughout the housing industry and on housing affordability.
While skyrocketing lumber prices (up more than 300% from April 2020) have dominated industry headlines over the past year, the prices for other materials like steel, concrete and gypsum products all continue to climb at a record pace.
“Steel mill products price volatility is greater than it has been at any time since the Great Recession,” wrote NAHB Senior Economist David Logan in a recent article for Eye On Housing. “Over the past three months, prices have climbed 22%. Perhaps more concerning than rising prices is that the pace of price changes has quickened each of the past nine months.”
Logan goes on to note prices for gypsum products have increased 12.5% during the past year, including a notable surge over the last two months. He also cites “unusual volatility” of ready-mix concrete prices, which have gone up in each region of the country.
Ultimately, price surges and supply constraints will increasingly price prospective buyers out of the market. Moreover, the issue is disproportionately harming middle- and low-income households.
“[Rising materials prices] are significantly driving up prices for single-family homes and apartments,” wrote NAHB Chief Economist Robert Dietz in his bi-weekly newsletter Eye on the Economy. “Combined with expectations of rising interest rates, these higher prices place additional pressure on housing affordability, which continued to decline in the first quarter.”
NAHB continues to ardently advocate for solutions, urging the Biden administration, Congress and other lawmakers to take action. The topic was recently discussed at length during House and Senate hearings held earlier this week. Key highlights from the hearings will be posted on NAHBNow shortly.
For more, go to nahb.org/lumber.