Lumber prices 2022 – soaring and adding to housing market woes

Nevertheless it’s not simply lumber that’s getting prohibitively pricey. In response to the most recent information from the Producer Worth Index report launched by the Bureau of Labor Statistics, the worth of products utilized in residential building rose by 1.5% in December. Constructing supplies costs elevated 16% final 12 months, the info reveals, and have risen 18.8% since December 2020.

With the pandemic as a looming backdrop, attendant market modifications made for the proper storm, Leonard mentioned. “We simply noticed a COVID slowdown in building and a growth within the housing market. The housing market was getting higher, after which it simply took off. After final 12 months, when it declined to the $400 mark, quite a lot of the distribution aspect of it didn’t need to re-enter {the marketplace}.

“So even whereas demand stayed robust, we weren’t filling inventories. By December, the market simply took off as a result of folks wanted wooden for job websites, and it wasn’t obtainable within the distribution chain. So, the distribution goes to the mill and the mill doesn’t have the transportation capability to get the wooden over right here. It’s sort of like the proper storm.”

Mark Fleming, an analyst at First American Monetary Corp. in Washington, D.C., echoed comparable sentiments however places the lion’s share of the blame on a beetle. That’s not a typo: A beetle, as in a bug, is essentially accountable for escalating lumber prices which have not directly affected house costs, by Fleming’s reckoning.

“There are the apparent culprits – larger tariffs and elevated demand for Canadian lumber for house constructing,” Fleming informed Mortgage Skilled America. “However that’s not the actual downside. The availability of Canadian lumber from British Columbia is extremely constrained as a result of a devastating beetle infestation killed a considerable amount of bushes a few decade in the past, and the useless bushes made wildfires extra devastating. All of which has resulted in an actual scarcity of accessible provide to reap.”