Lumber prices in the US are expected to reach record highs in Q2 2021, driven by reduced supplies caused by Covid-19 shuttering sawmills and lumberyards, a rise in demand due to new home construction and tariffs on Canadian lumber. The surge in lumber prices will raise project costs for homeowners, builders and renovation contractors. This could lead to delays in construction activity and losses for the industry, such as those experienced by Canfor during the pandemic. It is expected that prices will stabilise in late 2021 or early 2022 as more sawmills and lumberyards reopen.

US Lumber Prices Continue to Spiral, Record Highs Predicted in Q2 2021

Over the past year, the American lumber market has witnessed unprecedented price hikes, and this trend is only expected to continue. For homeowners, builders, and renovation contractors, this is bad news as high lumber prices can significantly increase the cost of their projects. This article will explore what’s driving lumber prices up, some of their expected effects, and how long we can expect this trend to last.

Reasons for Lumber Price Hikes

Several factors contribute to the increasing cost of lumber that we’ve witnessed in recent months. One of the primary drivers of this trend is the COVID-19 pandemic. The pandemic led to many sawmills and lumberyards shutting down, which, in turn, led to a reduction in lumber supplies. As a result, there has been an imbalance between supply and demand, leading to higher lumber prices.

In addition to the COVID-19 pandemic, other factors contributing to the uptick in lumber prices include:

• The increase in demand for new homes, which leads to more lumber consumption
• The imposition of tariffs on Canadian lumber
• The 2019 reduction in the rate of home construction, which saw many sawmills and lumberyards close down

Effects of Rising Lumber Prices

Soaring lumber prices mean increased project costs in various sectors, including construction, remodeling, and home improvement. Ultimately, these higher costs will trickle down to consumers who want to build new homes or remodel an existing one by increasing the overall cost of the process.

While constructors and contractors can pass on the extra costs to their consumers, higher prices could also slow down or halt construction activity put off investment and provoke major losses for the industry. For example, during the coronavirus pandemic, the major lumber market players like Canfor faced losses in hundreds of millions of dollars.

When Will the Trend Stop?

According to most experts, there’s no end in sight for the lumber price surges currently sweeping the US. Many expect prices to continue to rise throughout the summer, and maybe even into early autumn. Some analysts believe that these prices could hit record highs in Q2 2021, and if this happens, it would be a severe blow to the construction industry.

The lumber market could stabilize in late 2021 or early 2022, depending on supply and demand dynamics. As more sawmills and lumberyards reopen, and the economy continues to recover from the COVID-19 pandemic, the supply chain should stabilize, causing lumber prices to return to normal.

FAQs

What is causing the sudden surge in lumber prices?

The COVID-19 pandemic led to many sawmills and lumberyards shutting down, which, in turn, led to a reduction in lumber supplies. This, coupled with an increase in the demand for new homes and tariffs on Canadian lumber, has created an imbalance between supply and demand, leading to higher lumber prices.

How long will the price hikes continue?

According to most experts, there’s no end in sight for the lumber price surges currently sweeping the US. Many expect prices to continue to rise throughout the summer and into early autumn, and possibly even hit record highs in Q2 2021. The lumber market could stabilize in late 2021 or early 2022, depending on supply and demand dynamics.

What are the effects of rising lumber prices?

Soaring lumber prices mean increased project costs in various sectors, including construction, remodeling, and home improvement. This can lead to delays in construction activity, loss of investment, or ultimately, significant losses for the industry.

Will lumber prices return to normal anytime soon?

Lumber prices should return to normal in late 2021 or early 2022, depending on the supply and demand dynamics. As more sawmills and lumberyards reopen, and the economy continues to recover from the COVID-19 pandemic, the supply chain should stabilize, causing lumber prices to return to normal.