Multifamily Starts Drop 73% as Construction Input Costs Clim

Impact on Your Procurement Strategy

The Bureau of Labor Statistics (BLS) reports residential construction input prices rose 1.3% in April 2026. This increase is largely tied to a 74.4% year-over-year surge in No. 2 diesel fuel, which raises the cost of moving logs to mills in the US South and Pacific Northwest. Softwood lumber prices increased 1.1% in April, but since broader input goods rose 1.2%, mills are facing higher overhead that limits their room for discounting. Demand in the multifamily sector has contracted sharply. Q1 2026 starts reached only 55,000 units, a 73% drop from 2022 levels. With the construction pipeline down 50% from 2023, the pull on distributor inventories for apartment projects is fading. Freddie Mac reports 30-year fixed mortgage rates at 6.36%, but financing remains a hurdle for developers facing slow rent growth. Buyers should move toward just-in-time purchasing. With asphalt up 18% and warehousing costs up 15.3% in April, the cost of holding inventory is high. We expect the framing lumber composite to soften by 1.4% by May 15, 2026. Prices have already slipped 1.6% over the last three weeks, indicating the recent rally has hit a ceiling.

Key Takeaways

• Wait until after May 15 to finalize framing lumber buys to benefit from a projected 1.4% price softening.

• High diesel costs—up 74.4% annually—will keep a floor under freight rates even as lumber demand weakens.

• Use just-in-time inventory strategies for Q2 to minimize holding costs and avoid overpaying for panels and framing.

Market Outlook

Pricing Trend: DOWN

Confidence Level: MEDIUM

Recommended Action: Postpone large framing lumber commitments until after May 15, 2026, to take advantage of a projected 1.4% price decrease.

How LumberFlow Helps

Use LumberFlow to track these shifts and check our weekly price forecast for the best Q2 entry points. Our daily market insights provide the data on energy costs needed for freight negotiations.

Ready to stay ahead of market trends? Book a consultation with our team to see how LumberFlow's procurement platform transforms dimensional lumber buying.