Lumber Prices Rollercoaster for New Home Buyers
Lumber Prices Rollercoaster for New Home Buyers
COVID-19 stay-at-home orders have kept us all, well, at home, and with that comes the decluttering, vigorous cleaning, and of course endless DIYs! If you have been renovating or DIYing at home you have probably noticed the increased price for lumber.
If you have tossed in the towel altogether on your home and have just decided your home is no longer the one for you, there will certainly be lots of new build projects coming to The Blue Mountains and Meaford area soon. So if you are thinking of buying a new build these increased lumber prices concern you too!
If you read my recent blog post on the current housing market then you know we are at the lowest interest rates since 2010. These low rates resulting from the pandemic, combined with excess cash that people are saving (because we aren’t spending on unnecessary items) has led to skyrocketing housing demand and therefore increased demand for lumber as new build subdivisions are selling out fast!
From May 2020 to May 2021 the cost of lumber has skyrocketed up 377%. Visual capitalists shared this wonderful visual depiction of how many homes in 2020 vs 2021 50k worth of lumber would provide. It helps visually break down how much lumber prices affect new builds. WOW!
It is easy to blame it all on COVID and that is definitely a part of the equation, with a limited number of people allowed to work in the lumber mills, production is also limited. Lumber is a commodity that fluctuates with supply and demand, this means that the increased amount of people at home doing projects and building new homes = lumber gets more expensive. All of these reasons combined with past deforestation issues (pine beetle infestation, forest fires, etc.) has caused the big May/June shortage in lumber supply. The demand is still there, but now is steadily decreasing.
Why, you might ask, is lumber NOW decreasing? What’s with the rollercoaster ride of ups and downs in price?
Keta Kosman, publisher of Madison’s Lumber Reporter, in their mid-summer 2021 update video states: “Over the past six weeks to two months, [there has been] a lot of pushback from the customers where they’re holding off on buying in the hopes that the lumber prices will go down – a very successful effort on their part.”
Since June lumber prices have been steadily decreasing from the all-time high in May, this can be attributed to the easing of lockdown restrictions with people spending less time at home & working on home renovations, and more time safely socializing/being out once again. That being said, experts caution lumber buyers not to expect lumber prices to return to pre-pandemic levels anytime soon.
So dear reader, if you are able to hold off on your new home renovation that may be the best for your pockets as falling lumber prices won’t be reflected in the retail sector for a while yet. If you are looking at a new home build, you may be in luck! Builders will be able to secure a lower price with big buying power so hopefully, that translates to plenty of new build subdivisions coming and better pricing to you the new build home buyer. Check out our development section or reach out to me via email or the contact us page so we can get your name on a preferred client list.
Email: trishduncan@royallepage.ca
Cell: 705-539-0241 – text anytime!!
