On April 15th, 2021, lumber prices hit an all-time high on the Chicago Mercantile exchange at a whopping $1,260 per thousand feet board! According to the National Association of Home Builders, lumber prices have risen approximately 180%- that is approximately 3.52x more than what it was last April, according to Fortune.
Throughout the pandemic, lumber prices have been on the rise and there are several factors that have caused this steep increase. One of the obvious being that lumberyards all over the world were put on limited production schedules due to the COVID-19 pandemic. Lumberyards are now trying to recover from their worksite limitations.
“Lumberyards are overcommitted on their sales, and there isn’t enough wood to cover”, according to Stinson Dean, CEO of Deacon Lumber told Fortune.
While quarantine orders were put into place, many people took upon hobbies and do-it-yourself projects to fulfill the surplus time of being at home. More people were purchasing lumber that normally wouldn’t have in years prior. This caused a constant need of supply to meet the demand of new consumers.
Aside from lumber prices increasing, the housing market also was booming throughout the pandemic. Not only have mortgage prices hit record lows, but the supply of homes available for purchase has decreased as well. This caused an increased interest for many potential buyers to build their own homes, contributing to the high demand in lumber.
“For those in the impossible position of estimating lumber costs for some 2021 project, move your number higher.
– There is a really, really good chance we are higher for longer. Demand is too strong, and mills don’t have spare capacity to meet it.
Demand side is the driver.”
On top of a crazy high demand in lumber over the last year, there has also been an issue with the lumber being produced. According to Quartz, the lack of supply for lumber is also a result of decade-old mountain pine beetles that have been infesting forests in British Columbia.
According to scientists, beetles are living longer, reproducing faster, and essentially are swarming over 44 million acres of forest in British Columbia all because of a warming climate. Quartz says that 15-17% of British Columbian lumber are direct sold in US markets. This is a huge contributor to a low supply in US lumber.
As you can see, some of these issues don’t seem to be solving themselves anytime soon. Dean also tweeted, “If you want #lumber prices to come down, just stop buying lumber.” While the demand in lumber needs to be decreased, people still need to build homes.
There are other ways that you can still build your dream home without having to pay high prices for lumber. According to NAHB Research Center, form-core panels, light-gauge steel, and welded-wire sandwich panels are different options for home building materials that are great alternatives to using lumber.
You can also build you home with sustainable materials like bamboo, straw bale and watershed materials (Elemental.Green). Along with sustainable building materials, you can offset high lumber prices is by going green! Installing solar panels, super-sealing the building envelopes, utilizing smart appliances that regulate energy usage, and installing south facing windows to naturally heat your home are just a few ways that you can maintain an energy efficient home, according to Zero Energy Project. Maintaining a high energy efficient home not only will also help contribute to minimizing wasting energy, this will also save you money in the long term by not having high electric or gas bills.
Be sure to contact your home builder before you finalize your plans to get a professional opinion. Questions about how you can finance your new home’s construction or renovation projects? We’re just a call away! 888-604-2525