What the **** is Up With the Price of Lumber?
There’s Plenty of Blame for Lumber Prices Triple What They Were 9 Months Ago
If you’re in construction or even trying to tackle some DIY projects to improve your home, there’s no escaping that price of lumber is soaring. In some cases, we’re seeing prices 3 times higher than they were at the beginning of the year.
What’s up with that???
- Lumber prices currently run more than triple what they were earlier in the year in some areas
- New home construction is running at a higher pace than 2006
- Mills are seeing slowdowns due to the pandemic
- Canadian lumber tariffs sit around 20%
Factors Affecting the Price of Lumber
Supply and Demand
There are several factors in play and, chances are, you’ve heard at least one of them. Like so many other supply interruptions in 2020, the pandemic is part of the problem. Supplies are low, but demand is still high, resulting in higher prices that come from a simple supply/demand relationship.
Continued Construction Pace
As I’m writing this, 5 major developers are concurrently building out a 550+ acre community on the other side of the street from us. It’s massive and they don’t seem to be slowing down in the least—except when they run into these supply issues.
In fact, new home sales are at its highest pace since 2006 according to a National Association of Home Builders report from September 24, 2020.
Pandemic Mill Interruptions
It’s certainly not that the mills are artificially slowing production to drive prices higher. Worker illness or temporary facility shutdowns due to the virus are at least partly to blame. As they are able to return to pre-Covid production levels or perhaps even ramp it up higher, we should see some relief.
Canadian Lumber Tariffs
Another piece of the puzzle is tariffs on Canadian lumber. Standing around 20% since 2017, it’s not a new thing. Tariffs on wood coming from our northern neighbors have been in place for decades, though it is currently higher than it has been in the past. There are some calls to lower or halt the tariffs to ease the cost increase, but it remains to be seen if they will be heard.
We Want to Hear From You!
Hopefully, we’ll see the lumber prices begin to drop as we shift into the fall and winter seasons, but it’s anyone’s guess what happens next spring.
How has the price of lumber affected your business or the construction of your home? Are you making any changes to the materials you’re using? Let us know in the comments!
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