BiggerPockets Daily Rising Lumber Prices Threaten Developers as Construction Costs Mount
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May 21, 2025 Lumber prices have skyrocketed 23%, putting pressure on major developers and raising concerns over affordable housing. This surge is linked to sawmill closures and potential tariff increases on imports. HUD's Secretary is advocating for deregulation to ease construction hurdles and unlock federal lands for development. However, budget cuts loom, complicating efforts to stimulate new housing amidst rising costs. The combination of escalating material prices and shifting policies signals a turbulent future for the housing market.
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Lumber Price Surge Impacts Housing
- Lumber prices surged 23% year over year in April, causing cost pressures on homebuilders.
- Higher lumber costs lead to fewer homes built and increased home prices for buyers.
Builder Struggles with Lumber Costs
- Steve Martinez, a contracting president, said lumber price volatility makes budgeting nearly impossible.
- He points to supply issues like sawmill closures and shipping costs from Alaska as key challenges.
Tariffs Threaten Lumber Supply
- The US imposes a 14.5% duty on Canadian lumber, which supplies 85% of imports.
- This tariff may jump to 34.5%, worsening material cost inflation and housing affordability challenges.