Rising softwood lumber prices over the last 12 months have added $35,872 to the price of an average new single-family home, and $12,966 to the market value of an average new multifamily home, according to the latest estimates from the NAHB. The increase in the multifamily value translates to households paying $119 a month more to rent a new apartment.
For the prices reported by Random Lengths on April 17, 2020, the total cost to a builder for all the lumber and manufactured lumber products described above was $16,927 for the products in an average single-family home, and $5,940 for the products in an average multifamily home.
A year later, based on Random Lengths prices reported on April 23, 2021, the fully phased-in costs have risen to $48,136 for the softwood lumber products in an average single-family, and $17,220 for the products in an average multifamily, home. These estimates represent a 184 percent ($31,210) and 190 percent ($11,280) increase in single-family and multifamily builders’ lumber costs, respectively, during the course of the past year.
Prices to home buyers have gone up somewhat more than this, due to factors such as interest on construction loans, brokers’ fees, and margins required to attract capital and get construction loans underwritten. For items such as lumber that are purchased and used throughout the construction process, NAHB estimates that the final price will increase by 14.94 percent above builder cost.