BIRMINGHAM, Ala., May 18, 2021 /PRNewswire/ — Soaring lumber prices that have tripled over the past 12 months have caused the price of an average new single-family home to increase more than $50,000, according to new analysis by the National Association of Home Builders (NAHB). The concern over the pricing that has halted production for some new homes, including those for Habitat for Humanity, has caused alarm for builders across the country.
In order to educate representatives on the increase and the damage this may cause to the housing market, local members of the Greater Birmingham Association of Home Builders, members of the National Association of Home Builders, and Blake Corder, President of the Home Builders Association of Alabama, are going to Washington, D.C., to meet with lawmakers Wednesday.
The group is concerned that the disproportionate price increase will affect the affordability of homes, especially for first-time buyers. The increase in homes that were $250,000 increased close to $300,00 and homes that were in the $400,000 range have increased to around $475,000.
The cost of supplies for building and remodeling homes has increased tremendously over the last 12 months. However, there is one small group of manufacturers that is a huge portion of the increased building costs, raising their prices almost 700%. This issue is with the oligopoly of the Oriented Strand Board (OSB) manufacturers. Below is a recap of the impact this oligopoly has had on lumber pricing.
On January 1, 2020, OSB was $7.90 per sheet for a 7/16-inch material including sales taxes. On May 15, 2021, OSB was $60.50 per sheet for a 7/16-inch material including sales taxes.
This is an increase of $52.60 per sheet or 665% increase. This has a huge increase in cost because a 2,400-square-feet home will use about 350 boards per house at an additional cost of $15,645 per home. This by far is the biggest single increase in production costs. Also, it is significant to know that the majority of the price increases have been in the last 90 days. In talking with lumber distributors, there is to be expected even more of an increase in pricing for OSB over the coming months.
The members are traveling to Washington, D.C., to ask congressional representatives to reach out to the distributors and to inquire as to why they are increasing the rates so egregiously. It is the hope that these representatives can help to create change with the increased OSB pricing.
If you are interested in interviewing a representative from the Greater Birmingham Association of Home Builders, please contact Heather Jeffcoat at 205-515-1972 or by emailing email@example.com
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SOURCE Greater Birmingham Association of Home Builders