Lumber prices could drive up cost of new homes
ABILENE, Texas - The price of lumber is on the rise, and that may affect the cost of building new homes.
The cost of lumber in June was 17 percent higher than the previous year. This past April saw a 12-year high in prices.
Local lumber company BMC says 75 percent of its business goes to contractors who are building new homes.
"Say they bid a job two months ago. Now the prices are about 12 percent higher than where they were two months ago. That affects them that affects their bottom line, what they have to pass on to the consumer, which is you and I," said Randy Roy, BMC contractor sales specialist.
Lumber mills in Canada ship lumber to the United States but can only send a limited amount tax-free. Once they exceed the given limit, the excess is taxed.
"Some of them have cut back on their production, which has raised the cost because they're wanting to recoup whatever they're fined, and only way to do that is to raise their price, and that's where we're at," says Roy.
Higher prices could hurt contractors in the area, which trickles down to affecting cost of new homes.
"It affects the housing market here as far as the number of starts per year. That'll be down probably this year compared to a year ago," says Roy.
He says labor cost is another big contributing factor to the increase in home building costs.
"The labor pool which to pull from, there's not that many people coming in to our industry," says Roy.