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SOARING LUMBER PRICES DRIVING UP HOUSING COSTS

 WASHINGTON, March 9 /PRNewswire/ -- Prospective home buyers as well as consumers planning home improvements or remodeling jobs are feeling the pinch from lumber prices that have skyrocketed 90 percent in five months, according to the National Association of Home Builders (NAHB).
 J. Roger Glunt, president of NAHB, speaking at a press conference today, said the Clinton administration and Congress should move quickly to reverse rapidly rising lumber prices that have increased the cost of building a typical home by about $4,500. "We're not just talking about a seasonal increase. We're talking about the highest prices ever recorded," he added. As of Friday, March 5, the price of 1,000 board-feet of framing lumber stood at $474, according to the Random Lengths Composite Index.
 Glunt, appearing with Mark Rey of the American Forest and Paper Association and Denny Scott of the United Brotherhood of Carpenters and Joiners of America, said the skyrocketing cost of lumber was identified as the most critical issue facing the housing industry by the 60,000 delegates attending NAHB's convention in Las Vegas late last month.
 "There is no question that these higher lumber prices are making housing less affordable and are disrupting the housing market," he said. "Other things being equal, a $4,500 price increase would price about 127,000 buyers of new and existing homes out of the market."
 NAHB is urging President Clinton to convene a timber summit to address the growing conflict between overly restrictive environmental laws and regulations and the nation's need for natural resources on federally owned lands.
 "We urge the president to hold the summit as soon as possible and to include builder representatives as major players in that discussion," said Glunt, noting that new residential construction and the remodeling and repair business account for about two-thirds of all the softwood lumber sold annually.
 "In addition, the administration can move quickly to eliminate the 6.5 percent countervailing duty on lumber imported from Canada and to order the salvage sales of dead or dying timber on federal lands," Glunt added. "Over the long term, the administration and the congress will have to reform the Endangered Species Act, specifically requiring the government to take into account economic impacts -- such as job losses and housing cost increases."
 Without immediate action, the supply of lumber will continue to decrease, pushing prices even higher and threatening shortages, Glunt warned.
 Glunt also refuted claims by some environmental groups that the current high prices are merely the result of higher demand. In 1992, housing starts totaled 1.2 million units. NAHB is forecasting 1.32 million units in 1993 and lumber demand is projected to grow from approximately 45.3 billion board-feet in 1992 to 48 billion in 1993.
 "This is still a very modest housing rebound," he said. "The 18 percent increase in housing starts reported in 1992 is well below the 61 percent increase in housing production reported in 1983 and the 1.32 million housing starts forecast for 1993 is well below housing production levels of the 1980s when housing units were started at an annual rate above 1.6 million for five consecutive years."
 Demand for 48 billion board-feet of lumber in 1993 is also well below the peak of 50.5 billion board-feet sold in 1987.
 "Clearly, constraints on supply -- not increases in demand -- are chiefly responsible for sending prices sky-high," Glunt added.
 Using conservative assumptions about wood use in housing construction and other categories, softwood lumber demand is expected to climb to 51 billion board-feet in 1994 and 54 billion board-feet in 1995. "Under current federal policies, we can anticipate only greater volatility in price and supply of lumber for the foreseeable future," he said.
 -0- 3/9/93
 /CONTACT: Cynthia Dodd Adcock of the National Association of Home Builders, 202-822-0450/


CO: National Association of Home Builders ST: District of Columbia IN: PAP CST SU: ECO

DC -- DC015 -- 4591 03/09/93 14:49 EST
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Date:Mar 9, 1993
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