According to the National Association of Home Builders’ latest estimates, changes in prices for softwood lumber products that occurred between April 17, 2020 and July 08, 2021 are enough to add $29,833 to the price of an average new single-family home, and $9,990 to the market value of an average new multifamily home. The increase in multifamily value, in turn, translates to households paying $92 a month more to rent the new apartment.
The increases are somewhat less than the April 2020-April 2021 effects NAHB reported three months ago (a $35,872 increase in house price and $119 increase in monthly rent). At first glance, the latest estimates might seem high relative to recent declines in framing lumber prices, but there are a couple of factors to keep in mind.
First, even after the recent declines, framing lumber prices are still roughly twice as high as they were in April of 2020. Second, framing lumber is only one of the softwood lumber products used in the average home. NAHB’s estimates also include plywood, oriented OSB, particleboard, fiberboard, shakes and shingles—in short, any of the products sold by U.S. sawmills and tracked on a weekly basis by Random Lengths. Estimates developed from the Builder Practices Survey conducted by Home Innovation Research Labs show that the average new single-family home uses more than 2,200 square feet of softwood plywood, and more than 6,800 square feet of OSB.
Moreover, unlike framing lumber, prices of these items have not declined substantially in the recent past. In fact, since April of 2020, the price of softwood plywood has increased by more than 200 percent, and the price of OSB has gone up by nearly 500%.