Cuts in production compounded by DIY demand during the COVID-19 crisis has helped push lumber prices to their highest levels in two years.
The National Association of Home Builders (NAHB) reported that the Random Lengths Framing Composite Price hit $523 per 1,000 board feet for the week ending July 10, marking the first time prices have topped the $500 level since July 2018. Additionally, lumber prices have soared 50% since April 17, 2020.
The hike in prices has been caused by a perfect storm of lumber supply and demand.
When the pandemic hit in early spring, lumber mills closed due to stay-at-home and social distancing measures enacted by state and local governments. Mills then decreased capacity between March and April as housing was projected to be severely impacted by the COVID-19 pandemic, resulting in a possible freefall in demand.
But what lumber producers did not account for was a huge upswing in demand from DIYers and big box home improvement retailers during the crisis. In the meantime, housing has made a quick comeback this summer after a slight stumble in spring.
Demand from DIY customers has yet to recede, however, including pressure treated products used in decks, fencing, and backyard children’s playsets.
According to the NAHB, mills have been taking orders for the end of July as far back as early June and continue to play catch-up with demand for boards. Also, some builders and lumber traders are playing orders without a guaranteed delivery date or price.