A recent surge in lumber prices is contributing to the rising cost of home building in North Carolina.
There was a big uptick in lumber prices during the COVID-19 pandemic, as housebound residents took up home improvement projects. That normalized somewhat this past spring and summer. But lumber prices are once again soaring, due in large part to sanctions against Russia, the largest lumber exporter in the world.
John Hatcher, executive director of the North Carolina Forestry Association, says that domestically, we’ve seen fewer sawmills in North Carolina combined with landowners holding on to their lumber due to low market prices following the 2008 recession.
"So you have abundant supply, and you have limited capacity and high demand, and so that is why we are seeing lumber prices the way they are currently," says Hatcher.
According to a CNBC report, the National Association of Home Builders estimates that a recent lumber price jump added nearly $19,000 to the price of a new home.
Steven Webb is the director of legislative affairs and special projects with the North Carolina Home Builders Association. He says that in addition to the uptick in lumber prices, homebuilders are also facing rising costs for other materials along with labor and contractor shortages.
"We’re really not in a good place right now," says Webb. "Our members are doing the best they can trying to produce the products with the materials that are available, and under the circumstances, but things are going to get more expensive for both renters and homebuyers."
Webb says he would like to see lawmakers make land-use changes with local governments, which could increase lot availability for forests and mills across the state.