We are nearing completion on our new build. We were doing framing last April and our lumber materials was about $85k. I guess that means if I was building the same house right now the same lumber would cost $300k, a $215k increase? How in the world is anyone getting started on a new build right now?

Our cabinet materials in September/October were about $60k and based on the index it looks like lumber is only up about 100% since then, so that would be $120k today I guess?

Anyone really knowledgeable on the subject and can provide better information? With wood being so much of what goes into a house, including floors, doors, etc, it seems like a new custom build would cost about 25% more than 1 year ago. If so, that is insane.

This is our 3rd new build over the last 7 or so years as I'm somewhat addicted (sold the 2nd as a spec), and as we're nearing completion on this one I already had my sights set on number 4, but not if it's going to cost 25% more to build the same house. INSANE

Price for a new build is up 25-35% since last fall.
Lots of stories of people with new builds just completed stepping right into 100k plus in equity over night.

The lumber price you are seeing is for deliver month.
May is 1500. July 1376, sep 1235, nov 1090
Part of it is supply and demand, crazy demand right now and an unprecedented lumber shortage driven primarily by the pandemic. Supply is trying to play catch up but until demand cools off prices are going to elevated. Also part of it is commodity traders with a short position (meaning they owe someone a standard lot of lumber delivered via the cme contract vesting. Well they don't want to deliver as they took this position hoping the price would fall and then they could buy it back to flatten out and no goods are exchanged. Supply dwindled, demand shot up and now they have to buy anything they can to flatten out.

Same thing in reverse happened for last years june oil contracts. Pandemic hits, oil demand cratered and everyone who was long oil sold it all the way down to negative $30 because they literally had no way to take delivery or their storage facilities were at capacity.

Rustys - You have great info. Can you cite your source for the lumber delivery decrease in the fall? I want to share it with a builder that I'm hoping will delay a project for me until fall.

https://www.cmegroup.com/trading/agricultural/lumber-and-pulp/random-length-lumber.html

AgProgrammer said:

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People are paying more than what these houses are going to be worth in a few years. Not a good deal.

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With allot of patience, and a little luck you can buy the dip and make out like a bandit.

Demand may sweep allot of foreclosures off the market, but sooner or later the dip will come.

Diggity said:

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https://www.cmegroup.com/trading/agricultural/lumber-and-pulp/random-length-lumber.html

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This

I see that telling a different story. Look at how fast the Nov futures are rising. They are rising much faster than the May futures did over the same time period.

Maybe I'm looking at something wrong.

Futures down to $774 for September. Any of you guys seeing this reflected in the cash price yet? I hear OSB and plywood are still insane. Any movement there yet? Hoping to get this house started soon!

There's more expensive lumber in the pipeline before that less expensive stuff comes available. Still a few months off.