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Spike in lumber prices could affect plans for homebuyers

The pandemic has increased the prices of some building materials like lumber.
The pandemic has increased the prices of some building materials like lumber.(KSFY)
Published: Mar. 17, 2021 at 6:09 PM CDT
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SIOUX FALLS, S.D. (Dakota News Now) -The pandemic has increased the prices of some building materials like lumber. According to the National Association of Home Builders, it’s leading to some new home contracts being canceled.

Lumber prices have spiked due to increased demand and supply constraints.

“The industry just has not had time to catch up. You know, we had the COVID-related items, some shutdowns were seen there. Still, supply site has been very tight and the housing and construction boom has just not let up at all,” said Dana Iverson, Allied Midwest Sales Manager in the lumber division.

Lumber companies are also seeing a delay in product.

“I actually ordered material last November and December to arrive the second quarter of this year already. So it’s that far out,” said Iverson.

Labor shortages are also contributing to the problem.

This is having an effect on those looking to build a new home. According to the National Association of Home Builders, the increase in lumber prices has added over $24,000 dollars to the price of an average, new single-family home since April of 2020.

However, Tom Jarding, President of the Homebuilders Association of the Sioux Empire doesn’t want all this to deter people from considering building and purchasing a new home.

“Lumber prices and materials where they’re at, I mean it’s all still doable, it’s all still feasible. You look at what lumber has done cost-wise and on a 30-year mortgage, you know you’re talking about 100 bucks (more) a month spread out over your mortgage,” said Jarding.

“We’re still looking at great interest rates when we look at historic rate levels.”

The National Association of Homebuilders is also looking for ways to solve this current lumber crisis by reaching out to Congress for help.

“It’s comforting for people to know that there’s an advocacy for us as contractors, but even more so to the consumer that’s fighting for, you know impactful decreases in the cost of lumber in the long-term,” said Jarding.

Advice for those looking to build right now is to be patient and plan early on as projects are likely to take longer than expected.

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