Lumber prices around the country are soaring. In fact, projects you plan today may cost thousands of dollars more than they would have last year.
This is one of the most talked about topics in new construction and home improvement. But how did we get here, and what can we expect moving forward?
Here’s what you should know about the lumber cost crisis.
An Unexpected Problem
Experts who forecast the demand for new homes and residential remodeling projects in 2020 missed the mark, but that was just one part of the problem.
Then the Covid-19 pandemic hit.
Quarantine life changed everything. More people than ever started working from home; that is, when they weren’t home-schooling their kids.
In their free time, people tackled home improvement projects in record numbers. So, the demand for wood to use in projects such as new decks and fences, skyrocketed.
Meanwhile, the World Health Organization and Centers for Disease Control and Prevention’s guidance in response to the pandemic led to sweeping changes and a restricted labor force.
With fewer people available to chop trees and mill lumber, while demand steadily increased, the problem worsened. Now, the industry is still struggling to keep up.
What to Expect in 2021
Over the past year, lumber prices have increased 250% and the average single-family home has increased by $36,000, according to the National Association of Home Builders.
So, is this the new normal?
Prices are expected to dip 50% by the end of the year, but if you ask me, good ol’ American competition will drive down costs even more.
This could happen one of two ways: Exorbitant pricing could stagnate new construction and home improvements, or more people will choose wood alternatives, such as PVC, to complete their projects.
We’re already seeing some of the stagnation. An estimated 18% of homeowners are putting in their concrete foundations but waiting out the economy until wood prices go down.
And we’re seeing added competition, both in the commercial and non-profit sectors. Non-profits like the Habitat ReStore have plenty of wood at many of their locations nationwide.
I’m optimistic. I think we’ve seen the most expensive lumber prices we’re going to see, and I think it’s going to get better real soon.