Lumber prices rise as production ramps up

Anyone looking to build or renovate a home has quickly encountered the latest sticker shock item: lumber.

Lumber prices have tripled in the past year, adding nearly $36,000 to the cost of a new home. In late April, the National Association of Home Builders said the price of framing lumber was approximately $1,200 per thousand board feet — compared to $350 per thousand board feet in April 2020.

What happened? A number of things. Consumer demand went up last year as people who were stuck at home undertook DIY projects in droves. Lumber mills shut down early in the pandemic.

As they reopened, they ramped up production and are running at full capacity, according to the Wall Street Journal.

And there were other factors already at play, including increased demand from millennial buyers in their home-buying peak, record low-interest rates, and international trade policies. All of these elements and more combined to create the jump in prices.

Consumers are handling the price increase in a number of ways, including delaying projects or reducing square footage, as well as looking for savings in finish materials or appliances. Now that wood production has increased, experts expect prices to come down, though perhaps not back to pre-pandemic levels.