The pandemic has been difficult on many industries – and the lumber industry has been one of the hardest hits. As the full effects of the outbreak took hold of the world, it set off a perfect storm that led to a lumber shortage. As a result, many Americans – namely millennials who are reaching their home buying and owning periods, rushed to home supplies stores to stock up on building materials for DIY projects before the mandated lockdown.
As the recession set in, real estate prices and values decreased and created a demand for construction supplies, including lumber, used by almost 90% of Americans to build their homes. In conjunction with the COVID-19 restrictions placed on lumber mills and supply chains which caused a slowdown in production resulted in an unprecedented and historic lumber shortage in contemporary history, which could have a huge impact on 2022 lumber prices.
The Transition of Prices from the Pre-Pandemic to the Endemic Era
Before the world went into lockdown, the standard prices for lumber ranged from $350 to $500. However, as the COVID-19 infection rate increased, the demand for lumber soared as home building and renovation became more popular. Notably, the price of one-thousand board feet lumber rose from $400 to $1600 in early May 2021. In late August this year, the prices bottomed out at around $400, and currently, the prices have fluctuated and rose to the $700 – $800 range – almost twice its pre-pandemic rates, but experts say that this might be the new normal in the near future.
The Resurgence of Lumber
As the prices rose to almost three times their pre-pandemic rates in Spring this year, logically, the demand for lumber dropped significantly due to its high costs, causing many renovation companies and DIYers to postpone their projects. In an effort to cash into the all-time high prices, many lumber mills upped the ante on their production. An increase in production and a demand reduction resulted in a price correction – explaining the all-time low in August this year.
With the world recovering from the financial and social consequences of the pandemic, home improvement and renovation projects are all the rage again. As a result, experts have also observed a pent-up and unusually strong demand in the lumber market. However, the wildfire season of the US Pacific Northwest and British Columbia (which burned an estimated 237,172 acres of land) and the companies’ vested financial interests in maintaining a tighter supply level are driving up the prices.
Predictions for 2022
Experts predict that the demand for lumber will continue increasing in 2022 as a response to the backlog of the millennial cohort’s housing needs, which will again drive up the costs as lumber mills stand to benefit from this trend. However, as the market has transitioned into a more balanced and stable state than at the start of the summer this year, a sudden surge in wholesale prices is not likely. This is also likely exacerbated by the increased tariffs placed on lumber from Canada. The rates will be possibly double from 9% to 18%, thus having a domino effect on the production costs, lumber shipping costs, and subsequently the wholesale prices of the lumber.
Quality Service at Fair Rates
At US Framing, our goal is to provide our customers with the highest-quality wood construction at the fairest, most competitive, and ethical prices. We have never stopped trying to achieve this endeavor since we opened our doors. We persevere in creating long-lasting relationships with our clients, partners, and customers. We believe in a people-first approach to foster and create a positive and mutually beneficial environment in the wood framing industry.
For more information on the types of wood framing services we offer, please do not hesitate to contact us today!
