Now Might Not Be the Time To Build That Mother-In-Law Suite for Grandma
If you've considered adding a deck, building a she shed, or a new addition to your house recently, you may have encountered an issue: Lumber is really expensive right now.
The National Association of Home Builders reports that between April 2020 and April 2021, the "price per thousand board feet" increased by nearly 250% — from $350 to a whopping $1,200. The price increase didn't stop there. In early May, price per thousand board feet soared to a record high of $1,515, according to Fortune. The price of lumber is a nightmare for anyone who got the itch for a little home improvement while hunkered down during the pandemic. It's even worse for home builders and home buyers who are bearing the brunt of these astronomical price increases.
So what caused lumber prices to skyrocket? Like with many things in the world right now, COVID-19 had a substantial impact. At the heart of the pandemic, lumber mills closed up shop and sold off supplies in case the housing market tanked. That eventually led to less lumber in your local hardware store. If you remember back to Economics 101, when supply gets low, prices increase. As everyone stuck at home seemed to have the same great idea of taking on home improvement projects, lumber vanished off the shelves faster than ever. That higher demand and lower supplies meant even higher prices.
As the lumber prices rose, those costs trickled down to the home building business, raising construction and home building costs. As folks still reeling from the pandemic rushed to buy new, bigger homes, others hunkered down, so there were fewer houses on the market. That meant more people were looking to buy newly constructed homes. Those newly constructed houses came with higher price tags, though, thanks to the higher lumber prices. The National Association of Home Builders reported that the "unprecedented spikes in lumber prices have added nearly $36,000 to the average price of a new single-family home, and nearly $13,000 to the price of a multifamily home since April 2020."
The skyrocketing prices and increased housing costs, according to the Charlotte Observer has "left government officials and those within the industry grappling with how to rebound supply and bring costs down." Luckily some of their efforts appear to be working. Fortune reports that the lumber bubble may have broken, as lumber prices have gone down for the eighth consecutive week. That could mean things are looking up for home builders and DIY enthusiasts. Price drops at the lumber store may not be instantaneous, though, because as Fortune previously reported, there is a huge backlog of projects just waiting for wood. Soon, though, you may be able to build the pergola of your dreams without breaking the bank.