The Indiana Builders Association says single-family building permits throughout the state rose 25 percent in April, compared to the same month the previous year. However, the organization says high lumber costs are having a negative effect on home builders’ profitability.
The IBA says 1,640 permits were issued in April, which is also a 7 percent increase from the previous month.
"The growing demand for homeownership has undoubtedly encouraged builders to escalate production," said IBA President Pat Richard. "However, while consumers urge the industry for more, record-high lumber cost have hurt builders’ bottom lines, making it more difficult to produce housing at every price point, especially troublesome for the first-time home buyer."
The National Association of Home Builders says framing lumber prices have risen 59 percent, compared to the start of 2017. Since that time, rising lumber prices have added more than $7,000 to the price of a typical new home.
"These supply-side increases pose a real problem for builders trying to stay within budget, while still creating a housing market that is diverse in both size and pricing,” said IBA Chief Executive Officer Rick Wajda. “Given Indiana’s tight housing inventory, coupled with the increase in employment and demographic tailwinds, we should continue to see a boost in demand for newly built single-family homes.”