Lumber Prices Are Finally Dropping By Mari Krashowetz, Executive Officer at Southern Utah Home Builders Association
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nyone who has tried to purchase or build a new home within the last year is very aware of significantly higher lumber prices and building material supply shortages. Lumber prices skyrocketed during the pandemic, hitting an all-time high of $1,686 per thousand board feet last May, an increase of over 400 percent from the $333 it was trading at just one year prior to the recorded high. As a result, the price of a new single-family home increased significantly, causing some potential homebuyers to wait it out in hopes that housing prices would stabilize or decline. Now, lumber prices are finally coming down, causing builders, homebuyers, and lenders across the country to feel hopeful. Robert Dietz, Chief economist at the National Association of Home Builders (NAHB), is cautiously optimistic, saying that some building projects, suspended when lumber prices skyrocketed, may be able to resume. “If it’s the case that the price is coming down because it does represent a true uptick in the amount of supply, we’re going to see some of those projects move forward,” he said. Will lumber prices continue to decrease and will building materials become more readily available in the near future? No one knows for sure, but local lumber and building materials suppliers cannot solve this problem and are not to blame. Although we have definitely been impacted here locally in southern Utah, this is a national issue that requires a national solution.
Why Did Lumber Prices Surge? The following may help answer the “whys” behind what happened with the price increases. Was it related to the pandemic? Was it related to the labor shortage? Was it related to the limited supply and high demand in the housing market? You’re welcome to do your own research, but here are some facts you may want to consider: • Many mills reduced production due to stay-at-home orders and social distancing measures enacted by state and local governments at the onset of the coronavirus pandemic. 30 Southern Utah Business Magazine :: Fall 2021
