Lumber Prices on the Rise – What’s the Impact on New Home Builds?

As most products tend to fluctuate in availability and cost, there are times when a product is unavailable but the consumer continues to require it. This demand has impacts on individuals, projects, and businesses. It could lead to a cost hike, a change in the product components, or even force an industry or product to drown. Lumber or wood for building homes is no different, and its availability can be affected by environmental impacts, low or slow workforce, and shipping to make it available for these new homes to exist.

Construction worker carrying lumber to new home build

High Demand, Low Availability

Although lumber may be hard to source or way too overpriced because of availability, this has not put a pause on new home construction, though it does slow the process. Lumber is needed throughout new home construction or home improvement projects including floorboards, doors, and numerous 2x4s. Because the demand and shortage are high, the wait is long and the financial commitment for both the contractor and the homeowner becomes more of a burden than a dream come true. The time spent waiting is less time and manpower that a contractor has available for other projects.

Client-Builder Relationship

As mentioned, the inconvenience of a lumber shortage can cause some rifts between the potential homeowner and the contractor. The contractor is desperately trying to meet the client’s needs and original deadline but cannot control the influx speed of the necessary product without breaking the bank. The contractor cannot likely shoulder the costs when they get to 3 times the budgeted amount. Reaching back to the client for another financial investment is not necessarily a pleasant conversation but it may be necessary and hopefully, the relationship will not lose trust through the process.

The Unplanned Costs

It is essential to plan for these surprise waves in the market. For general contractors and home builders, there is usually a good amount of time that the potential client has before accepting a bid or contract. At that time the lumber prices could shift quickly, meaning increased costs could surely be in sight. Therefore, it is important for the contractor to be transparent with the client about these possible changes in the market which could affect the total costs and time. It’s understandable that a new home buyer would want to take their time making the right choices – it’s a huge commitment. But it should also be reasonable that the contractor has no control over outside influences on the cost or availability of necessary materials to complete.