As we’ve explored in previous newsletters, 2020 has seen an unprecedented surge in lumber demand that has driven prices for lumber and building products to an all-time high. However, new reports indicate this trends looks to finally be slowing. Let’s dive into the current lumber market forecast.
Lumber Prices Finally Drop
September saw the industry reach its all-time high for the price of framing lumber, reaching $950 per thousand board feet. However, as of last week, that price has fallen to just over $750, a drop of nearly 20%. However, this is still an increase over prices in October of last year, where lumber peaked at just over $420 per thousand board feet.
What’s Responsible for This Trend?
Lumber is a notoriously seasonal market. Winter usually brings a downturn in demand for lumber products as construction projects slow. DIYers that helped feed the initial 2020 lumber demand spike have also begun to taper out with the colder weather. However, the market still is experiencing higher demand than this time last year for a variety of factors, including a surge in the homebuilding market, and vast forest fires that have limited lumber production across the Western US and Canada. Lumber prices begin to fall with each winter season, but the unique conditions of this year mean we can expect prices to fall slower than years past.
The Housing Market Remains Booming
Prices for residential construction are still on the upswing, including a 1.8% climb in for prices paid on residential construction goods in September, according to the US Bureau of Labor Statistics. More staggering however is how 2020’s lumber boom has increased the prices paid for new homes. This unprecedented year has added as much as $16,000 to the price of a new home, as of August. Exceptional mortgage rates and huge demand across the US don’t look to be on the downturn as of yet. While lumber prices begin to fall approaching the winter, it still appears that they aren’t trending down as fast as they have in years past.
National Lumber Works With You to Provide the Building Materials You Need
At National Lumber, we’ve worked with builders throughout the unexpected ups and downs of the year to make sure they have the materials they need to keep creating fantastic projects. Reach out to our sales team today to get the lumber you need for your next build.