February 11, 2022

Reports Show Softwood Lumber Costs Continue to Rise

It’s been a tough year for the home building industry. The lumber shortage is so extreme that some builders are finding it difficult to pay for that roof, much less the walls, ceilings or floors. Unfortunately, the trend is continuing upwards – with reports showing that prices paid for goods used in residential construction continued to increase in July.

As explained by National Association of Home Builders' (NAHB) Eye on Housing blog, softwood lumber costs are up nearly 30% over three months, pushing building materials prices higher:

Prices paid for goods used in residential construction continued their upward trend in July, increasing 1.8% (not seasonally adjusted) according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. It is the third consecutive monthly increase since the index declined three months straight by a total 5.4%.

The index has decreased 1.3% year-to-date (YTD), a larger decline than the prior record for a July YTD decrease (-0.9% in 2000). Prices paid for goods used in residential construction have only fallen five times between January and June since 2000.

The Bureau of Labor Statistics includes energy costs in the calculation of the index of goods inputs to residential construction.  As of the December 2019 detailed weighting tables, energy accounts for 13.9% of the cost of inputs used in residential construction.  The previous weight was 10.7%.  One can see that diesel fuel, for instance, appears to be influential in the overall monthly price changes given by the index.

The index of goods used in residential construction, less the energy components, increased 0.4% in July and has declined four times over the past 12 months compared to six monthly decreases for the index including energy.  The average monthly change in the index less energy has been roughly 0.25% greater than that including energy (+0.10 v -0.16%).

Read the full article by NAHB.

DPIS is here to help with up to 15% savings on lumber

In response to the lumber shortage, DPIS Builder Services can help builders save up to 15% of total lumber costs through their frame engineering services. When lumber costs can reach more than $40,000 per house, saving that 15% can make a huge difference.

Frame engineering services include a ceiling joist layout, beam locations, rafter layout, purlin and strut locations. Depending on the builder preference, floor design is also available. DPIS even provides the length callouts to help your estimating team become more efficient.

To see how much you can save on lumber, contact the DPIS team.

For more ideas on how to reduce lumber related build costs without sacrificing build quality, be sure to read: "3 Lumber Related Ways to Reduce Build Costs."