Why Builders Still Use Lumber Despite the Price Hikes

Although lumber prices have declined somewhat recently, this follows a period of record increases that started in mid-2020 and have left prices at historic highs.  In a recent NAHB survey, 94 percent of builders reported a shortage of framing lumber.  Despite this, as Tuesday’s post showed, wood framing remains the dominant construction method for single-family homes in the U.S., accounting for 91 percent of new homes completed in 2020.  Through May of this year, as Monday’s post showed, few builders were reporting a recent switch, or inclination to switch, away from traditional wood framing methods.

Why not?  If acquiring lumber has become such a problem, why are so few builders willing to make the switch?

Although there are several reasons, the top one is lack of workers with the necessary experience, according to results from special questions on the June 2021 survey for the NAHB/Wells Fargo Housing Market Index (HMI).  It seems the typical framing crew is not ready to immediately start building homes out of concrete or steel.  Eighty-two percent of builders responding to the HMI survey cited lack of workers and subcontractors with necessary experience as a significant barrier to switching away from wood framing.

Only 5 percent of the builders indicated that none of the potential problems listed in the survey was a significant barrier.  After lack of experienced workers, in second place, was the relative cost of materials, cited as a barrier to non-wood framing by 42 percent of builders.  Not only have materials like steel and concrete tended to be more expensive than lumber historically, they have also recently been subject to their own shortages and price hikes.  The costs of re-designing and re-engineering homes to conform to a new construction method, buyer resistance, and difficulty obtaining inspections and approvals from local building departments were also each cited by more than a quarter of home builders as significant barriers to switching away from traditional wood framing.

For all these reasons, abandoning wood framing in favor of alternate construction methods doesn’t offer a quick, simple or easy solution to the problem of rising costs that are squeezing buyers with modest incomes out of the market for new homes.

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2 thoughts on “Why Builders Still Use Lumber Despite the Price Hikes

  1. I fully agree with these reasons. The three reasons that would be the biggest for me are the lack of labor, design change costs and getting our jurisdictions ready for approvals and inspections for non-wood products. It sure will be interesting to if builders will eventually make some changes depending on how long the lumber issues last.

  2. There are definite concerns with my company ever switching from residential wood framing to alternative forms of construction due to lack of knowledgeable framing subs as well as higher costs of materials and permitting / inspection issues in our region. There is also in residential remodeling, a serious issue with homeowner insurance companies paying out fair value claims for disaster damaged homes. Insurance companies send homeowners a print out of claims by an adjuster using a software program of costs that just don’t match the reality of true costs of materials or labor. The result is sub-par labor performing these repairs rather than professional builders who do the repair work to code. This becomes a huge safety issue of the remodel and homeowners are non the wiser of what is actually behind their walls. We are seeing a lack of professional remodelers in our area whenever a disaster does strike due to rising costs.

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