Fluctuating lumber prices impact new home builders and buyers

Spiking lumber prices are making it more expensive to build homes. KMBC 9 talked to a builder in the Kansas City metro who says the cost of a home can fluctuate by tens of thousands of dollars, based on lumber prices. We found out how it’s impacting builders and buyers.Figuring out how much lumber will cost to build a home is no easy task. “It’s a continually moving target, changes every week,” said Mike Watson, operations manager for Newmark Homes in Kansas City. He says the rising price of lumber can complicate construction. “We’ll see an increase of double or more, and then it’ll come back down to a normal level two weeks later,” he said. “It’s really unpredictable right now.”Watson says the fluctuating cost makes it difficult to give clients a firm price. “Unfortunately, it’s not something that we lock in at the contract time. Pricing’s based on when it’s actually delivered to the site,” he explained.He says in some cases, the cost of a home can go up by tens of thousands of dollars by the time the job is done. “Those prices can vary from nothing over, to $50,000 over, depending on the timing and the size of the house,” he said. For some buyers, it’s a deal-breaker. “We have had to have that uncomfortable conversation more than we’ve wanted to,” Watson said, “but some people have decided to just back out.”He says the company tries to lessen the impact on the buyer as much as possible. “We absorb everything we can, but at some point you gotta decide are we building houses for free, or to make a living?” he said. “Obviously, we do take a financial loss at it as well.”Watson says despite rising costs, the home building market is still holding strong. If you’re thinking of building, he recommends, “go into it open-minded. Be patient with your builder.” Because of supply chain issues and labor shortages, Watson says building a new home will not only cost more, but also take longer. Instead of 6 to 8 months, it now takes around 14 months to build a home.

Spiking lumber prices are making it more expensive to build homes. KMBC 9 talked to a builder in the Kansas City metro who says the cost of a home can fluctuate by tens of thousands of dollars, based on lumber prices. We found out how it’s impacting builders and buyers.

Figuring out how much lumber will cost to build a home is no easy task.

“It’s a continually moving target, changes every week,” said Mike Watson, operations manager for Newmark Homes in Kansas City.

He says the rising price of lumber can complicate construction. “We’ll see an increase of double or more, and then it’ll come back down to a normal level two weeks later,” he said. “It’s really unpredictable right now.”

Watson says the fluctuating cost makes it difficult to give clients a firm price. “Unfortunately, it’s not something that we lock in at the contract time. Pricing’s based on when it’s actually delivered to the site,” he explained.

He says in some cases, the cost of a home can go up by tens of thousands of dollars by the time the job is done. “Those prices can vary from nothing over, to $50,000 over, depending on the timing and the size of the house,” he said.

For some buyers, it’s a deal-breaker. “We have had to have that uncomfortable conversation more than we’ve wanted to,” Watson said, “but some people have decided to just back out.”

He says the company tries to lessen the impact on the buyer as much as possible. “We absorb everything we can, but at some point you gotta decide are we building houses for free, or to make a living?” he said. “Obviously, we do take a financial loss at it as well.”

Watson says despite rising costs, the home building market is still holding strong. If you’re thinking of building, he recommends, “go into it open-minded. Be patient with your builder.”

Because of supply chain issues and labor shortages, Watson says building a new home will not only cost more, but also take longer. Instead of 6 to 8 months, it now takes around 14 months to build a home.