Rising Lumber Costs Put Damper on Single-family Housing Starts in January: NAHB

Originally published on February 18, 2021, for the National Association of Home Builders.

Housing production softened in January as rising lumber prices continue to affect the housing industry. Overall housing starts decreased 6.0% to a seasonally adjusted annual rate of 1.58 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The January reading of 1.58 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 12.2% to a 1.16 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 17.1% to a 418,000 pace.

“Concerns over higher lumber prices produced softness for the housing market amid solid buyer traffic at the start of the year,” said NAHB Chairman Chuck Fowke. “With the cost of building materials rising at a rapid pace, the challenge for builders is to keep home prices at an affordable level for buyers even as the regulatory policy environment may become more challenging.”

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