A contractor frames a house under construction in Lehi, Utah, U.S., on Wednesday, Dec. 16, 2020. Private residential construction in the U.S. rose 2.7% in November.
George Frey | Bloomberg | Getty Images
Consumers want more newly built, affordable homes, but builders are finding that hard to deliver, especially as prices for framing lumber spike ever higher.
Lumber prices inched above $1,000 per 1,000 board feet Thursday morning before falling back below that milestone, according to Random Length Lumber Futures for March. The high of $1,004.90 is double the price from just three months ago and a record.
Higher lumber costs are likely behind a drop in January housing starts. Starts of single-family homes, which are the most desperately needed, fell 12% from December, according to the U.S. Census.
“Builders report concerns over increasing lumber and other construction costs and delays in obtaining building materials,” wrote Robert Dietz, chief economist at the National Association of Home Builders. “Rising interest rates will also erode housing affordability in 2021, as inventories of existing homes remain low.”
Dietz also noted that the number of single-family homes permitted but not started jumped 9.6% in December and was 28% higher than a year earlier, as building material cost increases and delays slow some home building.
Executives of some of the nation’s largest public homebuilders have noted on earnings calls that they have slowed production, hoping to wait out some of…