Lumber prices impacting more than than just new home buyers

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Posted at 5:00 AM, Jul 06, 2021
and last updated 2021-07-06 06:40:05-04

NORFOLK, Va. - Lumber prices are finally coming back down after hitting a peak in May.

The futures market in lumber dropped about 40 percent in the month of June.

Those who work in the industry say there's no guarantee they'll stay that way, though, and the increase in prices has already had a big impact.

According to the National Association of Home Builders, lumber prices went up more than 165 percent from April 2020 to April 2021.

That added about $36,000 to the cost of a new home.

And it's not just new home buyers and people doing renovations who are seeing the effects.

If you have to repair any damage to your home from a fire or storm, it could be more expensive depending on the type of insurance you have.

"A house that may have been $200,000 to rebuild a few years ago, you know, by the most recent estimates we have might be $235,000 to rebuild now," said Bob Buckel with Erie Insurance, "and if your policy limits you to the amount of coverage that you bought and you have a loss, you're only going to get $200,000."

That means the homeowner is on the hook for the rest.

Buckel says this may be a good time to check up on your policy.

Some companies like Erie have something called "guaranteed replacement coverage" which means they'll cover the cost based on current pricing.

Other companies may also have policies that cover a percentage of the additional cost.

Buckel says it's a good idea to check on your policy every few years to make sure you're covered for any renovations, new jewelry you've purchased, or anything else that could have changed since your first bought your plan.