Lumber Prices Hit 2-Year High, Up 50% Since April
The Random Lengths Framing Composite Price rose above $500 per 1,000 board feet for the week ending July 10, marking the first time prices have topped the $500 level since July 2018. Indeed, lumber prices have soared 50% since April 17, 2020.
The primary drivers of the price increase include:
- Mills closed in the spring due to stay-at-home and social distancing measures enacted by state and local governments.
- When prices fell between March and April as a result of the COVID-19 pandemic, mills projected that housing would be adversely affected and therefore anticipated a large drop in demand. Accordingly, mills that remained operational substantially decreased capacity utilization.
- Producers did not anticipate the massive uptick in demand from do-it-yourselfers (DIY) and big box retailers during the pandemic.
- Housing weathered the storm much better than most anticipated.
- DIY demand has not abated much as states reopen and construction demand has far surpassed lumber mills' projections.