Skyrocketing lumber prices earlier this year became a major hindrance for small and large-scale construction projects. The record-breaking cost was linked to many factors from the Covid-19 pandemic, including limited labor at lumber mills and increased demand due to lockdown building projects. But now, prices are starting to level off, leading many market watchers to declare that the lumber bubble has burst. This news may have homebuilders ready to return to the job site and homeowners ready to start remodeling, but it may not be time to hit the lumber yard just yet.
A Stand-Still For Large And Small Building Projects
At a price of nearly $1,700 per thousand board feet, early May marked the spike of demand and the low point of supply for lumber. At the time of this peak, many were wondering how severely it would affect the building of new homes and commercial and public projects, as well as how it would impact retail sales in home improvement and DIY supplier markets.
Over the last few months, sawmills have restarted their production, and with lockdowns being lifted, many consumers have opted for summer travel instead of remodeling investments. Homebuilders have also pulled back on production, partly due to the ramp-up of supply costs through much of spring.
Stubborn Prices For Retail Buyers
While the market price of lumber has dropped by more than half, retail costs remain high. A slow settling of prices is to be expected for several different reasons. Many commercial and professional builders have been quick to snap up supplies as they are replenished, amounting to a slower trickle for retail buyers. In addition to this, many big-name distributors and lumberyards are continuing to sell their inventory at the boom prices paid in early 2021.
Consumers who are waiting to resume projects using softwood lumber may see retail costs ease in the near future, but the costs of composite and engineered wood, such as oriented strand board, are expected to remain substantially higher than pre-pandemic levels. Stubbornly high prices on such goods are due mostly to global supply chain issues, which have been a burden for all types of industries.
Have you continued to encounter prohibitively high prices on lumber despite recent headlines? Share your experience in the comments.