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Builders and home buyers impacted as lumber prices skyrocket

Posted at 5:24 PM, Nov 04, 2020
and last updated 2020-11-04 19:38:08-05

DAVIDSON COUNTY, Tenn. (WTVF) — Lumber prices have skyrocketed, and it’s affecting local home buyers and builders.

"To give you an idea, OSB is up 300% since January, and the studs you see on the wall are about 120, 110% since January," said David McGowan.

At Burkitt Commons, Regent Homes President David McGowan said they try to be upfront with buyers that home prices may increase since lumber prices have gone up.

"We experience it daily. On this home right here to date, that you’re looking at, I’d say at least a 15 to $20,000 increase," he explained.

He calls the community off Nolensville Road 'surban,' which is a suburban area that has an urban feel. They’re selling a lot of the homes to young professionals and millennials. Some of them left places like New York and California for jobs in Tennessee during the pandemic.

Low interest rates are helping the real estate market, but the lumber industry hasn't recovered yet.

"So what happened in the lumber business is the lumber mills started shutting down in April, which in turn caused the loggers to shut down, they supply the lumber mills," McGowan said, "And so everything got shut down a period of almost a full quarter."

The issue is causing building delays in some cases.

"It’s not just lumber, windows are up 10% appliances are up 15%. In addition to that, can you get it? So you’ll see some of our buildings out here, it takes about 4 or 5 extra weeks to get the windows and the doors."

In other states with lumber mills, home building was not considered essential, so they had to close. In addition, other ones were shut down because they were anticipating a big decrease in the market according to McGowan.

While some people may have to wait longer to move-in, the real estate market in Middle Tennessee remains strong.