Despite rising building costs, the demand for housing is still at an all-time high. Will the lumber prices go down? Plateau? Or Rise even more?!
In early 2020 lumber prices plummeted due to the pandemic and global shutdown which caused building projects to come to a halt. The absence of building projects caused a surplus of lumber and resulted in lower lumber prices. But the prices quickly changed come June.
So are you wondering what caused the prices of lumber to quickly increase by more than 340%?!
The combination of low interest rates and a strong housing demand.
Due to low interest rates in home mortgages and new construction financing the building and remodeling industries saw a big boom of business when things started opening back up in June.
This big increase in business caused the lumber surplus to quickly diminish and turned into a shortage in the blink of an eye.
The demand for lumber has only continued to increase, leaving mills and processing facilities unable to catch up. This is why the price of lumber has increased so much.
Experts are currently predicting that the prices of lumber will likely never go back down to where they were before the pandemic. Even if the supply of lumber increases, it is estimated that the current prices will now remain the “new normal.”