How are lumber prices affected by the market?
The coronavirus pandemic put the world at a standstill, affecting industries all over the world. The lockdowns, quarantines, and mobility restrictions all caused major disturbances in the supply chain, resulting in a huge lumber shortage. Wood products were heavily hit by the pandemic, with lumber and plywood being some of the most affected.
According to Forbes, the cost of lumber went up by 375% between April 2020 and 2021. It peaked at $1,515 per thousand board feet in mid-May but has gradually fallen since then. Check out the lumber prices today to know what to expect for your next home improvement project.
Factors Driving Lumber Prices Up
The spike in lumber prices was mainly attributed to the high demand and low supply. Several sawmills stopped production shortly after the pandemic broke out. Many assumed there would be a housing crash, but instead, homeowners became more determined to stock up on building materialsfor DIY projects.
To the surprise of many, the pandemic also fueled demand in the real estatesector. Millennials sought for homes to invest in due to the low mortgage rates, but new constructions were lagging due to the shortage of lumber.
Lumber prices were at their highest during April and May this year, reaching over $1,000 per thousand board feet. According to the National Association of Home Builders, this spike resulted in an average $30,000 cost increase in the construction of a single family home and $10,000 cost increase for a multifamily home.
How Much is Lumber Today?
Fortunately, the lumber prices today have significantly gone down since its peak in May. After prices reached an all-time high earlier this year, many home builders and homeowners decided to lay low and stop buying for the meantime. It gave sawmills the time to increase their production and keep up with the demand for lumber.
At the end of August 2021, lumber futures were trading at around $474. Cash prices for framing lumber also dropped to $389 per thousand board feet, a significant drop from earlier this year. It put current prices much closer to pre-pandemic levels, which were at an average of $350 to $500. That said, some lumber yards are still apprehensive about dropping their prices, so you can still expect to see some high prices in the market.
With lumber prices today relaxing and gradually returning to pre-pandemic levels, building projects have started to pick up once again. Now that the lumber market is slowly reaching an equilibrium, construction is once again on the rise. However, monitoring prices will still be critical since the market remains volatile.
Source Quality Lumber from a Trusted Supplier
If you want to know more about lumber prices today, you can visit a reputable lumber company in Tampa. Peninsular Lumber is your one-stop shop for lumber, where you can source all the building materials you need. Our team can help you find the exact supplies for your project, so feel free to contact us today at 813-875-8805 to check out our selection.