What can you expect to pay for lumber at the beginning of 2022?
Lumber prices saw a massive increase at the peak of COVID-19 due to the sudden shortage caused by factory closures. Contrary to most expectations, demand for lumber skyrocketed because of increased demand for housing.
The pandemic may have caused most businesses and industries to take a dip, but real estate turned into a huge seller’s market, resulting in higher lumber prices.
So, how will prices look in the market in the coming year? Check out this lumber price forecast to see what experts and analysts predict for 2022.
High Prices Expected to Stay
While lumber prices were gradually declining earlier this year, prices started increasing again around August. By the start of December this year, the cost of lumber futures reached around $870 per thousand board feet, which is significantly higher than $389 in August. The price increase was attributed to a surge in renovations and home improvement projects.
While the price is still far from when it peaked at $1,515 in mid-May, the trend is already growing at an upward trajectory. Likewise, current prices continue to be higher than pre-pandemic prices, which hovered between $350 to $500.
Based on lumber price forecasts from analysts, the growth trajectory is expected to continue through the first and second quarters of 2022. High prices will be sustained due to the positive demand for housing—particularly multifamily properties—which will continue to increase wood usage.
Other External Factors Driving High Prices
Beyond the increased demand for real estate properties, there are also several other factors causing the high lumber price forecast.
First, transportation costs have increased due to extra pressures in the trucking industry. Rising diesel fuel costs and a shortage of truck drivers have made it more expensive to transport lumber. Given the number of deliveries that lumber goes through—from forest to sawmill to merchant—it’s not surprising that the price is so high once it reaches the consumer.
Second, many sawmills remain closed, while others operate at a limited capacity. Manufacturers have been trying to amp up their production to meet demand, but many have not been able to do this due to a lack of workers. The massive labor shortage has made it hard to increase production or open up closed mills.
Given all these reasons, you can expect lumber prices to stay high up until around the middle of next year. As of December 15, 2021, prices have already gone up to over $1,000 per thousand board feet. Thus, it is highly likely that they will reach over $1,500 again next year.
What does this mean for consumers? Naturally, prices will be much higher for construction for anyone planning to build homes. If possible, try to discuss rates with your contractor as early as possible to avoid overspending on your supplies. Likewise, if you have any plans for DIY projects, you should consider stocking up in advance.
Get High-Quality Lumber for Your Home Improvement Project
With the expected lumber price forecast for next year, securing supplies earlier than ever is best. While prices have not yet peaked and gone back to all-time highs, you should purchase all the lumber you need for your home improvement projects. Make sure to stock up and buy in bulk if you have big projects lined up in the coming months.
Whatever building materials you may need, Peninsular Lumber has you covered. We are a one-stop-shop for lumber with a wide range of wood for all your needs. Contact us today at 813-875-8805, and visit our lumber company in Tampa to get all the lumber and lumber supplies you need.