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Breaking Flooring NewsFloor CoveringsFlooring InstallationResidential Flooring

Commerce Secretary Pledges Full Support of Biden Administration to Resolve Lumber Issue

lumber
May 30, 2021

Commerce Secretary Gina Raimondo acknowledged during a meeting with the National Association of Home Builders' (NAHB) senior officer team the depth of the lumber price crisis and its effects on the residential construction industry, home buyers and renters.

Secretary Raimondo and NAHB CEO Jerry Howard discussed working together on convening a summit that would include representatives from the U.S. government, the lumber supply chain and the home building industry.

"Commerce Secretary Raimondo understands that high lumber costs are adding tens of thousands of dollars to the price of a new home," said NAHB Chairman Chuck Fowke, a custom  home builder from Tampa, Fla. "She heard our stories and acknowledged that she is concerned - and that President Biden is concerned - about the effect of the lumber price problem on the broader economy."

"There is a disconnect between lumber supply and housing demand," said NAHB First Vice Chairman Jerry Konter, a home builder from Savannah, Ga. "U.S. sawmill output increased 3.3 percent in 2020. But over the same period, single-family construction increased 12 percent to almost 1 million housing starts, and the remodeling market expanded 7 percent. We feel this mismatch between domestic production and rising demand for building materials is at the root of the unsustainable increases in lumber prices."

Current prices according to the Random Lengths Framing Lumber Composite Index - the industry benchmark - have more than quadrupled since April 2020 to more than $1,500 per thousand board feet. Lumber prices alone are adding nearly $36,000 to the price of a new home, pricing millions of middle-class households out of the market at a level they previously could afford, NAHB analysis shows.

Looking at domestic timber, NAHB Second Vice Chair Alicia Huey pointed out the decline in the domestic harvest, noting that as recently as the mid-1990s, roughly 10 billion board feet of lumber was harvested from the nation's forests each year. Over the last 10 years, the harvest has fallen below 3 billion board feet most years. Huey, a home builder from Birmingham, Ala., asked the secretary to advocate for better, more active forest management goals from U.S. national forests to help ease the current shortage.

NAHB Third Vice Chairman Carl Harris, a home builder from Wichita, Kan., encouraged the secretary to push for a lasting softwood lumber agreement with Canada. "We need trade policy that actually serves the interests of the American people and increases housing opportunity for first-generation home buyers," he said.

The effect of high lumber prices on low- and moderate-income families is a top concern of NAHB and the Biden administration, noted NAHB's Immediate Past Chairman Greg Ugalde.

"My company works with many first-time, first-generation home buyers," said Ugalde, a home builder from Torrington, Conn. "After all these lumber costs get added to the price of a home, those first-time home buyers are often the first to be eliminated from the market."

Raimondo noted that NAHB proposed tangible ideas for moving forward on the lumber problem, including better forest management, increased production from the nation's sawmills and working toward a more lasting agreement with Canada.

For more information about how NAHB is addressing the lumber crisis, visit nahb.org.

This article was originally posted on www.fcimag.com.
KEYWORDS: building materials construction housing market Lumber National Association of Home Builders (NAHB)

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