Lumber Prices: A Glorious Comeback?

Over the last month, lumber prices across the U.S. have soared once again. The price of lumber – the essential building construction raw material – has been extremely volatile since the beginning of the Covid-19 pandemic, drastically dipping and suddenly spiking throughout the last two years.

Despite an initial decline in prices in the new year, lumber prices have surged throughout February and are currently hovering around $1,272 per thousand board feet, prices not seen since summer 2021.

The most recent producer price index report published by the Labor Department revealed that prices for softwood lumber shot up a whopping 25.4% in the month of January alone. Current prices have not hit the peak that was reached in May 2021, but are still roughly 3X more expensive than the average price prior to the pandemic.

There are a number of factors that are collectively contributing to the rising prices and disruption of the lumber market, with a construction boom being a driving force.

Several factors can be playing into lumber shortage and price surge. The demand for housing continues to increase, which puts pressure on the supply chain. The supply chain is still being impacted by the effect of the pandemic on the transportation networks that are relied on to move the lumber. A shortage of workers continues to slow down the supply chain.

The spike in prices has also been reflected in the costs of home building and renovations. According to The National Association of Home Builders, the surge in lumber prices has increased home building costs by over $18,6.

The coastal wildfires that have hit the U.S. West Coast and part of British Columbia have added to the problem, as did torrential rains that struck the Canadian province late last year–which wiped out a number of key transportation routes.