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The all-time high cost of $1,700 for a thousand board feet has dropped to $500, but steel products are up 10.8% and gypsum (for drywall) is up almost 16% this year.<\/span><\/span><\/p>\n<\/div>\n NEW YORK \u2013 Doug Yearley, CEO of the luxury home builder Toll Brothers, told CNBC that a recent drop in lumber prices promped some significant savings on home building costs \u2013 but homebuyers shouldn\u2019t expect to see those savings. While lumber prices are falling, other material costs are surging.<\/span><\/span><\/p>\n Lumber prices reached a record high of more than $1,700 per thousand board feet in May. But on Wednesday, it averaged about $500. Yearley says that translates to about a $40,000 savings in building a home.<\/span><\/span><\/p>\n But steel mill product prices increased 10.8% in July following a 6.2% increase in June, the National Association of Home Builders reports. It blames tariffs on steel imports for adding to building costs. Also, prices for gypsum products, which are used for drywall, rose 2.5% in July and are up nearly 16% in 2021. Copper has also been in short supply.<\/span><\/span><\/p>\n \u201cThe tailwind of lumber coming down is very comforting,\u201d Yearley told CNBC\u2019s Jim Cramer. \u201cIt\u2019s going to help us. It\u2019s going to drive some margin. But I think it\u2019s going to offset some of the other cost increases that we\u2019re feeling.\u201d<\/span><\/span><\/p>\n Yearley says it\u2019s also taking longer to build homes with recent supply chain and labor issues. \u201cIt took about two weeks longer in our third quarter to deliver a home,\u201d Yearley says. \u201cWe expect that to continue for a couple more quarters as we manage through it.\u201d<\/span><\/span><\/p>\n The median sales price of a new home in July was $390,500, an 18.4% increase compared to a year earlier, the Commerce Department reported this week.<\/span><\/span><\/p>\n \u201cNew residential construction remains strong, but building material pricing and availability are likely to remain significant headwinds,\u201d Charlie Dougherty, an economist at Wells Fargo, told NBC News earlier this month.<\/span><\/span><\/p>\n\n