Soaring Lumber Prices Hike Average Cost Of New Homes Up Nearly $25K

If you plan on building a new home or renovating your current one in the near future, get ready for sticker shock. The price of lumber is soaring; KDKA's Paul Martino reports.

Video Transcript

- Well, if you plan on building a new home or renovating your current one in the near future, get ready for some sticker shock.

STACY SMITH: That's because the price of lumber is now soaring. It's rising so fast contractors are having trouble predicting just how much a job is going to cost. Paul Martino is live now at a new housing plan in Marshall Township. So Paul, what's causing the price hike?

PAUL MARTINO: Well, there's a variety of reasons, Stacy, but the bottom line is lumber prices have gone up more than 200% in the past year. And in the meantime, prices on new homes like these, they're going up too.

The National Association of Home Builders estimates the average price of a new home has gone up nearly $25,000 so far this year, and it keeps rising. The reason, lumber. It's the bones of any home. Developer Ron Heurich knows all too well.

RON HEURICH: 2 by 4's, and 2 by 10's, and truss joists, and so forth have gone up well over 100%.

PAUL MARTINO: Heurich is building several homes in the Mallard Pond development in Marshall Township. He's selling new upscale homes, but he can't predict his lumber costs.

RON HEURICH: A piece of particleboard, $9 a sheet last year. If you go to the store now, it's going to be probably at least $33 a sheet minimum.

PAUL MARTINO: What's causing the price hikes? Lumber plants closed during the pandemic, tariffs on Canada and China jacked up prices, and low interest rates have increased demand. For now, many contractors can't guarantee their prices. Some are putting escalator clauses in their contracts.

RON HEURICH: We basically have gotten stuck, you know, eating a lot of cost, but with new contracts we have to be aware that things do go up.

PAUL MARTINO: It's not just new homes-- renovation projects. Say you want to add a deck to your house. You'll pay plenty for it. Despite this price hike, with low interest rates plenty of people still out there buying new homes. Reporting live from Marshall Township, Paul Martino, KDKA News.