Following the price of lumber during the pandemic has felt a bit like being on a rollercoaster. The price for lumber hit a record high last spring at $1,515 per thousand board feet. In August 2021, increased production caused lumber to drop to a pre-pandemic price of $389 per thousand board feet, giving lumber buyers some much needed relief. However, at the start of the new year, the market price for lumber almost tripled, soaring back up to $1,111 per thousand board feet—186% above its price in August.
Last year, pandemic lockdowns and labor shortages caused low production while working remote inspired massive home renovations and low mortgage rates triggered a demand for homebuilding. These high demands for a product in low supply caused prices to peak.
However, the current spike in lumber price is not caused by the economic impact of the pandemic—this time we can blame Mother nature. The epicenters of North American softwood production, the U.S. Pacific Northwest and British Columbia, were wrecked by wildfires last summer. November brought a record rainfall, resulting in mudslides and flooding, delaying lumber shipments coming from the Port of Vancouver. As a result, the limited lumber supply cannot meet the high demand from builder’s increase in housing starts.
Where does it go from here? Unfortunately, we will not see cheaper lumber prices any time soon. With the U.S. housing market nearly 4 million homes short of buyer demand, builders will continue to remain busy, and buying more lumber, for years to come. #growyourroots #sycamoretitle