Texas A&M professor: Housing costs climb with supplies lagging | Local News
In addition to the supply-demand impact on the price of lumber, Birdwell said, 30% of the country’s lumber comes from countries that impose tariffs, such as Canada.
Between demand and fewer workers, he said, local builders have about a four- or five-month waiting period before they can begin a new home construction project. This means they have to factor in an 8% to 10% cost increase in the home price, he said, to account for the 2% monthly rise in lumber and wood costs.
With interest rates on homes still low, Birdwell said, the homebuilding business is a “seller’s market,” with some builders choosing to complete homes without a set price and place the homes on the market for people to make bids.
Birdwell said he does not think the price of lumber will return to the pre-pandemic price. The price will level off when production increases, he said, but he does not know when that will happen.
“The people who deal in lumber, they’re doing very well, and there’s really no incentive for them to increase their productivity,” he said.
If the trajectory continues, then in six months, he said, he anticipates the National Association of Home Builders to show the price of a new home being at least $50,000 more than the previous year.
Locally, Birdwell said, completed homes, which are considered inventory for builders, will be the best value.