Money does grow on trees or at least that is how things appeared in 2020 as lumber prices skyrocketed amidst an already chaotic time as the COVID-19 pandemic hit the world with force. Who would ever expect lumber prices to increase so rapidly?
Why Did Lumber Prices Spike?
Fueled by demand for housing and added DIY projects and additions tackled by people spending more time at home, lumber prices skyrocketed to all-time highs in early 2020 and for a period of time, caused shortages in building materials that halted new construction and other projects. New housing projects were put on hold and many people fell into a panic. Sawmills struggled to keep up with supply and demand. The demand for lumber had never been as critical as in current times.
In March 2020, the futures price of lumber sat at $303.40 per thousand board feet. The Framing Lumber Composite Price, a real-time index of construction-wood prices, estimated a cost of $1,514 per thousand board feet by May 2020.
The short supply of lumber drove up the price of lumber and other building materials. Luckily the futures price of lumber declined substantially in June 2021 and lumber prices have substantially dwindled to more moderate prices.
Why the Drop in Lumber Price Now?
Many factors have played part in the drop in lumber prices. Sawmills have finally ramped up production as many people out of work for various reasons (pandemic, layoff, etc.) now return to the workforce. The less time spent at home, the less time to work on those wood-related DIY projects, which has also been a key factor in driving down the price of lumber.
In early August, the price of lumber per thousand board foot dropped $1,114, a $211 decline in one week. The price is expected to continue dropping as the fall and winter months approach. The current standing price of lumber per thousand board feet is now $904.90 according to the Framing Lumber Composite Price.
The Future of Lumber
The future of lumber is not in limbo. Consumers are still feeling the spike in lumber cost compared to pre-pandemic prices but with continued decreases, the rate will resemble pre-pandemic pricing more closely, although experts agree we may never fall to the levels we saw before the pandemic.
However, consumers may not feel the effects of the lumber price decrease for several more weeks as businesses and builders continue to moderate the rise and fall of lumber.
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