Lumber Prices Continue to Rise
In the past 12 months, lumber prices have nearly tripled nationally provoking new home prices to increase by nearly $36,000. Respectively, this price hike has also added nearly $13,000 to the market value of the average multifamily home. With lumber and other building materials in short supply, the prices continue to climb.
So, how did this happen?
As manufacturers went on hiatus due to COVID-19 back in early 2020, the thought was the home improvement industry would slow down due to the pandemic. However, the opposite happened. As people were spending more time at home, they were taking on more projects (whether DIY or through a contractor).
The lumber price increase is simply due to supply and demand. People want more wood than there is available. As the country entered into a recession at the beginning of 2020, manufacturers acted accordingly thinking demand was about to fall.
Not only were new home prices effected by extremely low supply of lumber so was the Home Improvement industry. The cost has effected the roofing and siding industry as they rely on Sheets of OSB. OSB Sheeting just 6 months ago averaged $24.00 a sheet. Today we have prices for the same sheet hovering close to $60.00 and no end in sight.
With more and more American’s working from home, people started to build home offices, finish their basements, and so on. Families were also noticing they had out grown their homes. When they couldn’t find any on the market that fit their needs, they started to build. The hot housing market has abetted the need for lumber leading to the high material costs we see today.