Ever look at home prices and think, Did I accidentally time-travel to 2050?
That same three-bedroom house that sat on the market for six months in 2019? Now it costs more than a lifetime supply of avocado toast, and people are fighting over it like it’s the last PS5 on Black Friday.
And if you thought, Fine, I’ll just remodel instead, congratulations—you’ve just entered an entirely different financial nightmare.
So what’s actually going on?
The short answer: a perfect storm of rising material costs, labor shortages, supply chain chaos, and policy changes that keep making everything worse.
The long answer? Buckle up, because this isn’t going to make you feel any better.
Lumber Prices Are Back on Their BS (And Your Wallet Is Paying the Price)
Lumber prices have been bouncing around more than a reality TV couple’s relationship status. After reaching record highs in 2021, they dipped for a while, but now? They’re climbing again—fast.
Here’s why:
- New tariffs on Canadian lumber—A 25% tariff was slapped on top of existing anti-dumping duties, bringing the total close to 40%. That’s a massive increase.
- Supply chain disruptions—Fewer logs mean fewer boards, and fewer boards mean higher prices.
- Market speculation—Every time someone whispers, “Lumber prices might go up!”, prices immediately go up.
Lumber futures just hit $658 per thousand board feet, the highest price since 2022. And if you’re building or remodeling? That’s bad news for your budget.
Cost impact: A new single-family home is now estimated to cost ,500 to ,000 more just because of lumber increases.
Why Drywall Costs More Than Your First Car
It’s not just wood. The prices for everything from nails to kitchen cabinets are climbing because:
- Steel and aluminum tariffs—Your roof, frame, and appliances are now luxury items, apparently.
- Drywall tariffs—Since 71% of U.S. drywall comes from Mexico, these tariffs are pushing up homebuilding costs even more.
- Transportation costs—Shipping costs have come down since the 2021 madness, but they’re still way higher than pre-pandemic levels.
Cost impact: Experts estimate a 10% increase in building material costs this year, tripling what was expected. That means a basic home build that should cost $300,000 could now jump to $330,000—before you even pick out fancy upgrades.
So, We Need More Construction Workers? Cool. But Where Are They?
Here’s a fun fact that is definitely not fun: The U.S. is short about 650,000 construction workers right now.
What happened? Did they all get abducted by aliens? Win the lottery? Vanish into an underground society where people don’t have to wake up at 5 AM?
Not exactly. The real reasons are way less exciting:
- Tighter immigration policies—Fewer skilled laborers are entering the U.S., and there aren’t enough native-born workers to fill the gap.
- Nobody’s going into trades—For decades, schools told kids to go to college instead of learning a trade. Now we have a nation full of marketing majors and not enough electricians.
- The old guard is retiring—A huge chunk of skilled laborers are aging out of the workforce, and younger generations aren’t filling the gap fast enough.
How the Labor Shortage Is Driving Up Prices
- Builders are paying more for skilled labor. With fewer workers available, wages for construction jobs have gone up 5-10% in the last year alone.
- Projects are taking longer. A job that used to take three months now takes five because builders can’t find enough workers. Delays mean more costs—and guess who’s paying for that? You.
- Small contractors are struggling. Many smaller remodeling companies can’t afford the skyrocketing wages, so they’re scaling back, which reduces the number of available contractors even further.
Cost impact: Labor shortages are expected to add another $5,000 to $8,000 to the average cost of a new home in 2025.
Why the U.S. Can’t Just “Print More Trees”
It seems like an easy fix—if lumber and drywall imports are too expensive, why doesn’t the U.S. just produce more itself?
Short answer: Because we can’t. At least not fast enough to make a difference.
Long answer:
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- U.S. sawmills don’t have the capacity. Even if they ran full steam, there would still be a 3.2 billion board foot shortfall in lumber production.
- Expanding sawmills takes years, not months. You can’t just slap together a massive processing facility overnight.
- Labor shortages. The same workforce issues hitting homebuilders are also affecting sawmills.
Even if the U.S. pushed sawmills into overdrive, the most optimistic estimate says it would take until 2029-2030 before we could replace Canadian supply.
Why Environmental Regulations Restrict Logging (And Why That’s Not a Bad Thing)
You might hear that “environmental regulations restrict logging” and assume that’s the real problem. But cutting more trees won’t actually fix lumber prices.
Why?
- Overharvesting leads to long-term scarcity. If we strip forests bare, lumber prices will crash temporarily—then skyrocket once supply runs out.
- Forests protect against floods, erosion, and water shortages. Cutting too many trees increases mudslides and makes drinking water more expensive to treat.
- Wildlife and ecosystems depend on forests. Clear-cutting forests without sustainable management wipes out entire ecosystems.
- More logging doesn’t mean cheaper lumber. Sawmills are already maxed out—cutting more trees won’t help if they can’t be processed fast enough.
A better approach? Smarter, more sustainable forestry combined with increasing sawmill capacity.
Final Thoughts: So, What Can You Do?
Right now, building a new home or remodeling costs more than it should, and policy changes are making it worse.
- Lumber, steel, drywall, and aluminum are all going up in price.
- The NAHB is warning that these costs will keep pushing home prices higher.
- New homes cost at least $17,000 more than they did just a year ago.
- Remodeling is 10-15% more expensive, and material prices keep climbing.
What Can You Do?
If you’re buying a home:
- Look at older homes. They might need work, but they can be more affordable than new builds.
- Negotiate with builders. Some are offering incentives to offset higher costs.
- Consider waiting it out. If prices keep climbing, some buyers will bow out, and you might find a better deal later this year.
If you’re remodeling:
- Lock in contractor pricing now. Before material costs go up even more.
- Shop around for materials. Some suppliers have better deals than others.
- DIY where possible. If you can paint a room or install cabinets yourself, you can save big.
What do you think? Have you been hit with higher home or remodel costs? Let’s talk about it in the comments.
