Eye On Housing
Shortages of framing lumber are now more widespread than at any time since NAHB began tracking the issue in a consistent way in 1994, according to results from the May 2018 survey for the NAHB/Wells Fargo Housing Market Index. Over 30 percent of single-family builders responding to the survey’s special questions in May reported a shortage of framing lumber, outdistancing the other 22 listed building products and materials by a wide margin. In second place were trusses (with a shortage reported by 24 percent of builders), followed by lightweight steel and OSB (at 20 percent each) and plywood (at 19 percent). Last year, the reported shortage percentages for these items were significantly lower—21 percent for framing lumber, and under 15 percent for all other products/materials.
It is probably not a coincidence that the top five items on the 2018 shortage list are made of softwood lumber or steel, both of which have been targeted by the Administration with new import tariffs over the past year.
As noted above, the May 2018 reading of 31 percent is the highest the shortage percentage for framing lumber has been since NAHB incorporated the question into its HMI survey in September of 1994. Second highest was the 24 percent recorded in October of 2004. October 2004, however, was in the midst of a housing boom, when the annual rate of housing starts often exceeded 2 million—compared to the current rate of only about 1.3 million.
Although 31 percent is an all-time record for the framing lumber shortage percentage, in the past a few other building materials have experienced shortages that were even more widespread (a complete history for each material is available in the full survey report). In 1999 through 2001, for example, over 31 percent of builders were reporting shortages of clay brick, insulation, and gypsum wallboard. During the boom period of late 2003 through 2005, more than 31 percent at different times reported shortages of concrete, clay brick, lightweight steel, OSB and plywood. Builders also reported a relatively severe but short-lived scarcity of gypsum wallboard in May of 2006. The May 2018 result for framing lumber represents the most widespread shortage of any building material listed in the HMI survey since then.
What was the exact question asked in the survey? Are there shortages of framing lumber or shortages of reasonably-priced lumber?
The question asks builders about shortages, giving them the option to check if it is just “some shortage,” or if it is a “serious shortage.” There is no reference to price in this question. If you click on the “full survey report” hyperlink in the blog post, you will get a lot more detail (including the serious/some shortage breakdown for each building material). The last page of the full survey report contains a reproduction of the questionnaire, so you can see exactly how each question was asked.
How does supply and demand have really anything to do with the tariff if you don’t tie it back to the money. If 20% is the tariff then what is the rest of the increase if not supply and demand weather it is the number of projects, fires or beetle problems? I know, it must be that Canada is just getting back at the USA for putting any additional tariff on them.. Sounds like a good episode for South Park!
The December 7 2017 post uses measures of price sensitivity published in the academic literature of 1) the supply of domestically produced lumber, 2) the supply of lumber imported into the U.S. from Canada, and 3) the demand for lumber by U.S. consumers to estimate the impact of tariffs on lumber prices. The post then applies a conventional, widely used estimate of the responsiveness of housing demand to price in order to estimate the impact of higher lumber prices on new residential construction.
You can try and blame Canada for this one but it’s not going to work. I sell Lumber in Canada and we are suffering shortages here also. Our store is located on a Highway that is a Major trucking route into the US and we see on average 20 trucks a day headed South. Along with the train loads that go buy also, everyday. As for the Tariffs issue Canadians have seen lumber pricing increase up to 220% in the last year. Canadians are paying the price for our own governments inability to do anything on trade.
Has there ever been a survey of lumber that has been tossed into the dumpster at job sites? How vigilant are framers, carpenter’s and trades in general in controlling their lumber consumption? I can’t tell you how many times I have seen good lumber used to build saw horses, pallets jacks to hold roof sheeting and the odd benches, draft tables, etc. I am sure there is a business opportunity in there somewhere. Jim H.
We can expect to have higher waste when the “C” Team is hired to save money but in the long run the best resolution is to try and hire the “A” Team and make sure they understand that they are responsible for conserving as much material as possible.
If not, you hired cheap labor but are spending more on lumber and your time having to go to the lumber yard to get more materials.
I always see a lot of waste, its one thing I’m good at reclaiming lumber. I even re saw previously painted clear pine, everything you get now a days is finger jointed especially millwork. The little time I put in to surface old stock makes it enjoyable to see true clear stock, knot free from the 60’s and earlier.