Housing boom drives up lumber prices

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by Jeremy Desel / KHOU 11 News

khou.com

Posted on May 29, 2013 at 6:34 PM

Updated Wednesday, May 29 at 6:40 PM

HOUSTON—The housing boom has caused a huge spike in lumber prices.

"The supply chain can’t keep up with what is needed. The price goes up and that’s just the way it is. This one caught us off guard," said Zac Murtha, a custom home builder in the Spring area.

Murtha has been building homes in the Houston market since 2001 -- at the peak, nearly 30 custom homes a year.

The price he pays for lumber has spiked as much as 50 percent in the last year.

"I’ve never seen prices jump up so quickly other than in the Hurricane Katrina, Hurricane Rita, time frame," Murtha said.

Of course, the cost is passed on to the buyers.

The price of lumber is usually seasonal, but home builders didn’t see the normal drop this winter. Now, prices are poised to go even higher.

Lumber distributors say that part of the problem is getting lumber from suppliers who cut production dramatically after the housing bust and now can’t seem to getting things up and running fast enough.

It’s not just lumber—concrete and drywall are way up too.

Over time, Murtha thinks supply and demand will catch up and the market will even out.

"For now, the consumer is paying a premium to build a house in this market," he said.

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