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Home builders near 'breaking point' due to skyrocketing lumber prices

A local builder said a combination of factors, including reduced capacity at lumber mills and more people starting projects could be driving costs up.

MOUND, Minn. — It's no secret that the housing market is hot in the Twin Cities.

There's just one problem for those soon-to-be homeowners who would rather build their own dream home: skyrocketing lumber prices.

"In my segment of the market, the lumber prices would have been $100,000 to $200,000. Now, literally we're $175,000 to $300,000+ and then going up 5% month over month. That's not sustainable," said Rebecca Remick, COO for home builder City Homes.

Remick is familiar with the theories about what's driving prices up. The increasing price of lumber could be due to COVID restrictions in the mills, combined with more people starting their home projects during quarantine.

"The demand is putting more pressure on the mills and they're at 50% capacity and they just can't keep up," said Remick.

While City Homes hasn't seen a decrease in demand quite yet, Remick said builders are reaching a breaking point, with no sign of lumber price increases slowing down anytime soon.

In the meantime, Remick suggests those looking to build a home talk to their builder about how to handle the prices increases.

"We really need the mills and the government to figure out how they're going to fix this problem," said Remick.