- The soaring cost of lumber could add $24,000 to the cost of a new house.
- Blame a combination of supply chain disruptions and higher demand for the increase.
- You should think about creative ways to change your DIY projects so you don’t need to use as much lumber.
The global demand for lumber has skyrocketed since the world went into lockdown. Consider this stat: Lumber prices have risen by 130 percent since before the COVID-19 pandemic, which makes for an estimated $24,000 difference in the cost of a newly constructed single-family home, per data from the National Association of Home Builders. As of press time, the average lumber price is $1,372 per 1,000 board feet.
Accordingly, lumber futures have increased an astounding 375 percent between April 2020 and April 2021, Forbes reports. That basically means investors have sunk almost four times as much money into the same exact amount of wood compared to a year ago, because the spike shows no signs of stopping.
“The price of physical lumber seems like it still has to rise a bit more because mills are at capacity and unable to meet current demand,” commodities expert Sal Gilbertie writes at Forbes. “Price rationing is really the only solution, and lumber prices have clearly begun the painful process of finding the highest price above which few people, be they professionals or DIYers, will pay.”
Why Is Lumber So Expensive Right Now?
How did we get here? You can blame a few factors. For starters, construction of new homes has steadily risen for the last few years, even before the pandemic. As wealth increases around the world, lumber demand increases with it, because lumber is a totally fungible good that translates into virtually every economic situation worldwide.
Second, think about your own pandemic behavior. Chances are you spent the last year at home trying to tackle new (or long-promised) DIY projects for your backyard, like, say, a pergola.
Naturally, the pandemic has increased consumer demand for lumber for such projects. Ditto for restaurants, which also had to build an unprecedented amount of outdoor seating spaces to comply with COVID-19 regulations.
“Businesses are beginning to face the challenge of producing adequate supplies of goods and services—whether of lumber or of cold beer—to satiate that resurgent demand,” the New York Times reports. “After huge disruptions over the last year, the intricate networks by which major industries keep shelves full and services available have become frayed.”
This is a key part of the pandemic narrative around the world. Every industry relies on a supply chain, and many of these have been disrupted or even wrecked in the last year. That’s on top of regular shortages like steel and battery materials, unrelated to the pandemic, that occur in every industry from time to time. It’s a perfect storm of high demand and low infrastructural capacity.
What Can You Do?
If the price of lumber could keep