As people who design and build wood-framed houses, the sky-high lumber price is a legitimate concern to us because it has a direct impact on construction costs. Although do-it-yourself home improvement projects became popular during the pandemic, such consumer activity is not the main driving force of lumber prices.
We are not economists, but we need to understand the causes of the lumber price hike, be it retrospectively. So we have curated some essential readings that have helped us make sense (if there is any) of the situation.
Here is what we learned:
- Many domestic mills were either shut down or had reduced production due to pandemic restrictions throughout 2020.
- Low mortgage rates encouraged new home constructions, which drove up the demand for building materials.
- The industry expected a further downturn as the pandemic became more prominent.
- The remaining mills in 2021 cannot meet the high demand for building materials. Under immense pressure, the effort to increase production appears to be difficult as domestic labor is also in short supply.
- High tariffs discouraged lumber import from Canada.
Visualizing the Recent Explosion in Lumber Prices: Intuitive infographics highlighting the unforeseen magnitude in lumber price surge.
Lumber producers say homebuilders are wrong, import duties not causing price hikes: U.S. Lumber Coalition’s statement addressing rising lumber cost.
Homebuilders respond, say lumber producers are misleadingly underrating cost of lumber in a home: National Association of Home Builders’ (NAHB) rebuttal to U.S. Lumber Coalition’s article
Lumber Prices Push Up Further as Sales Volumes Remain High: Detailed insight of the most current lumber supply in North America, confirming its effect on end-users. Data hints that the price hike may not slow down as orders are backlogged for a month.
Why are lumber prices skyrocketing? The lumber shortage and housing boom, explained.: Consumer perspective and the meme culture