For months, the National Association
of Home Builders (NAHB) has been citing lumber prices as one of the headwinds
faced by new home builders as they try to pick up the pace of construction.
Those prices nearly doubled over a four-month period in 2020, reaching an all-time
high in September. Since then, they have continued their volatility and are now
considerably higher than that September peak.
Builders say the price and availability
of building materials is the top challenge they currently face. In their most recent NAHB/Wells
Fargo Housing Market Index survey, NAHB asked their builder members how they
are handling the increasing prices. The most common response, given by 47
percent of those responding was by “including price escalation clauses in their
sales contracts.” Paul Emrath, writing about the survey in NAHB’s Eye on
Housing blog, says these clauses tie the final house price to the price of
building materials while an additional 10 percent of builders are including
clauses sharing the increased amount between buyer and seller.

 

 

 

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