SACRAMENTO, Calif. (KTXL) — The prices of lumber continue to skyrocket out of control across the country and it may be contributing to the rising cost of homes in the Greater Sacramento region.
Sacramento is considered to be a top seller’s market. While there are plenty of homebuyers, there is a very slow-growing inventory of homes being sold and new homes being built. Part of the reason is expensive lumber prices.
The intensifying demand for new homes in this booming Sacramento housing market has homebuilders scrambling to keep up, and soaring lumber prices are not helping the situation.
In a recent study by Fortune, the average price of lumber is now 280% higher than what it was pre-pandemic, which is causing the cost of construction to increase 30% to 40%.
Jeff Pemstein is a division president for Homes by Towne, a privately-held national homebuilder. In Sacramento, they build about 150 single-family homes a year, as well as multi-family projects.
Pemstein said in a statement that for a typical 1,500-square-foot home, just rough lumber used for framing has increased from $14,000 per home to $29,000. He added this has and will continue to price buyers out of the market at a time when California continues to experience a significant housing shortage statewide.
If you compare prices of lumber at a Lowe’s or Home Depot from last year to now, a single board that was $2.99 is now close $9 or $10 today.
“It’s very stressed. There’s a lot of pressure on supply,” said Howard Hughes, a supervisor for National Wood Products Inc.
Hughes said their pallets can cost as much as a small SUV, which is roughly $12,000 to $15,000.
At National Wood Products Inc., which specializes in the upscale lumber people would use to build their new kitchen or hardwood floors, Hughes said COVID-19 is not the main factor for this lumber crisis.
“There is a real tight availability of labor in this country, people that do grunt work, manual work, material handling. And without those people, there is limited supply,” he explained.
He also said the national shortage of truck drivers, along with the rise of energy costs and global container freights, are creating a grim outlook for the lumber and housing industries.
“Until we get a large number of people into the workforce, even beyond what we had before COVID, this is the way it’s going to be for a long time,” he said.