The Ups and Downs of Lumber Prices in 2022
In case you haven’t noticed, custom home building has started to kick back into gear as the housing market has improved in recent months. Even though we’re well into the month of September, we can look back as soon as August to get a good idea of where the lumber market has been and where it’s likely to go.
August represented one of the most watershed moments in recent lumber market history. Today, we’re going to provide you with some information about the yearly price fluctuations, go over a brief August lumber prices update, explain what the future may hold, and give you some tips on how you can lower your lumber prices as a custom home builder.
Throughout the pandemic, the lumber market saw some fluctuations because of a decrease in custom home building and a variety of other reasons, but nothing like we’ve seen this year thanks to problems with the supply chain and inflation.
Since January of 2022, the price has had severe ups and downs, reaching its peak of $1,464.40 per 1000 board feet in early March according to Trading Economics. This rise in softwood lumber and panel prices, in addition to other increases, caused ripples throughout the industry.
May and August Have Been Turning Points
The good news is that the months of May and August seem to have been turning points for the lumber market. To give you a quick lumber prices update, consider the fact that even as recent as the end of April, prices were still slightly north of $1,000 per 1000 board feet.
In May, the price fell considerably and continued into early June where it hit $528. Since then, we’ve seeing multiple spikes, but toward the end of August, prices fell again, at one point reaching as low as $479. Small ups and downs have happened since then, but things have settled down quite a bit.
Home Builders Are Excited, But Still Cautious
Many custom home builders have become very excited about the recent developments, especially after so many months of being stressed that housing prices for building a new home would be out of their price range.
The lumber prices that we’re seeing now haven’t been this low since mid-November of 2021 when it went down to $536 per 1000 board feet. However, while home builders who are kicking into gear right now are very excited, others are being cautious because they’re not quite ready to order building materials and are unsure of what the future might hold.
What the Future of Lumber Prices Looks Like
Prior to the pandemic, experts in the lumber industry couldn’t have predicted the huge fluctuations in lumber costs. When they finally started getting a firm grasp on the reality of the pandemic situation and then things started to pick up again as lumber prices dropped, 2022 through a monkey wrench into the process.
Now, however, the prices being what they are throughout August and even into the current month, there’s every indication that price fluctuations will meet more normal expectations going forward. Like custom home builders, the industry itself is being cautiously optimistic.
What Home Builders Can Do to Lower Costs
Many custom home builders have basically been sitting around waiting for prices to decrease before starting their construction plans. Given the recent lumber prices update, this wasn’t a bad strategy, but there’s always more that can be done.
Here are just a few quick tips on how home builders can lower costs at any time:
- Find a Reliable Lumber Supplier — Check out online reviews, look into a company’s history, and have a chat with one of their workers to find a reliable lumber supplier in your area.
- Lock Down Your Entire Budget — Before you get too far into making plans for construction, it’s important you figure out the low end and high end of your budget.
- Know What Price to Expect — There are multiple online resources that will give you a good idea of what price you can expect to pay for lumber prior to contacting a lumber yard.
- Ask the Supplier for Advice — Lumber suppliers have basically seen it all when it comes to the lumber market, so ask them for advice as you gear up for construction.
- Hammer Out Delivery Terms — The price of delivery can represent a healthy chunk of your overall lumber costs, so figure those out with the supplier early on in the process.
Contact Peninsular Lumber for More Lumber Price Updates
Peninsular Lumber is the most respected lumber company in Tampa and the surrounding areas. If you’d like more information on the lumber prices update for August or are in the market for building materials, reach out to us at (813) 875-8805 today.