Lumber alone has added $51 per month in rent and more than $14,000 per newly built home, according to National Association of Home Builders and leading sources.
Wild swings have made it difficult to peg reasonable cost estimates for developers.
Paul Emrath, NAHB Vice President for Survey and Housing Policy Research, writing in NAHB’s Eye on Housing post, shared that based on July 1 Random Lengths prices, the costs have risen to $29,407 for the softwood lumber products in an average single-family home, and $10,734 for the products in an average multifamily home.
Emrath’s report said these numbers represent an increase of $12,480 (74%) and $4,795 (81%) in single-family and multifamily builders’ softwood lumber costs, respectively.
“This, along with rising wages for construction workers and higher interest rates, is one reason why the housing market is experiencing declining affordability,” Emrath wrote.
CBRE Expects Return to ‘Normal’ Cost Inflation to Return by Mid-2023
CBRE’s most recent Construction Cost Index forecasts a 14.1% increase in construction costs this year due to rising labor and material costs. It said that annual increases should return to the historical average of between 2% and 4% in 2023 and 2024.
“Overall cost inflation for materials is expected to begin easing by the end of 2022 and largely return to typical levels by mid-2023,” according to CBRE.