Skyrocketing lumber costs seem to be returning to pre-pandemic levels on a national level, but they remain high locally.
Since last spring, the average price of framing lumber has quadrupled, and OSB prices are up more than 400%, according to a report from the Home Builders Association of Georgia. These price increases have added nearly $36,000 to the price of the average, new single-family home, and nearly $13,000 to the market value of a new multifamily unit since April of last year.
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OSB accounts for the most wood product used in structural panel applications in new construction, the builders association website said.
Jay Frye, purchasing and estimating manager at Ivey Homebuilders, said those statistics track with what his colleagues have noticed in their industry.
“It was about the end of 2020 that we noticed the prices going up — quickly,” Frye said. “OSB was $10 a sheet and it’s gotten as high as the mid-40s per sheet now. We’re starting to see it go down every week a little bit but a lot of the lumber yards have to cycle through their materials and as they turn around their materials, we will see more of a decrease.”
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While Frye attributes a small downtick in demand due to more people vacationing and fewer planning a new home, the home back-up and ballooning costs on new builds is only worsening the issue.
Jim Chapman, president of the Homebuilders Association of Georgia, said, “Lumber price spikes are not only sidelining buyers during a period of high demand, but they are also causing many sales to fall through and forcing builders to put projects on hold at a time when home inventories are already at a record low.”
Data from the National Multifamily Housing Council has tracked lumber prices to a 90% increase from April 2020 to 2021 with lumber costs rising 34.3% since December 2020 alone.
Frye echoed a common sentiment amongst area business professionals: help is desperately wanted.
“Whether it be siding, lumber, whatever: everybody is hurting for help right now. For months, people eligible for stimulus have been able to make more money staying home than working, so there is still a labor issue,” Frye said.
No matter the industry, Frye said the supply chain is “broken,” and items like tubs, plumbing fixtures and almost anything metal has seen a significant hang-up from manufacturer to homebuilder.
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“And in some situations, they might have the materials, but there are no trucks under it. There’s a truck driver shortage as well,” said Frye.
The House Working Group on Rising Costs of Construction Materials was organized in mid-May. Speaker David Ralston appointed the group to look into why costs were increasing and to recommend solutions to ease the burden. The working group is authorized for the entirety of the 2021-2022 legislative term.
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At its July 7 meeting, the truck driver shortage came up. Common flaws cited for that industry are a high turnover rate, insurance companies keeping less experienced drivers from being hired and an aging workforce that’s not being replaced fast enough. These issues are ones that the group is attempting to address going forward.
Frye expects a full year to pass before the costs are back to normal in a pre-pandemic sense.
“It took time for it to get to this point and it certainly will take time to come back down,” Frye said. “We just try to stay optimistic all the time.”
Tyler Strong is the Business Editor for The Augusta Press. Reach him at tyler@theaugustapress.com.
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