The cost of lumber has skyrocketed in the last year. I noticed this last week when I bought a bunch of 2×4’s for a project at my house. Then I spotted the cost of lumber in the commodity tables in The Wall Street Journal and realized it was not my imagination.
The cost of 1,000 board feet of framing lumber was about $208 a year ago. Now it is $342.
These are the highest prices since 2006, when the housing boom was still in full blossom and Asian countries were using lots of construction materials.
Earlier this year, The Wall Street Journal explained what was happening to lumber prices:
“Lumber prices shot up because of a shortage of supply. When the housing market cratered, mills in the U.S. and Canada slashed production; output plummeted about 45% between 2005 and 2009, according to Random Lengths, an industry data provider.
“Wholesalers shrank their own inventories and had little incentive to build them back up last year. Housing is the largest single source of demand for lumber, and new-home sales fell 7.6% in December from the prior month, to 342,000 units.
“So when builders began their annual re-stocking for the spring construction season, there was little slack in the supply chain, causing a squeeze on prices. Some firms also stepped up speculative construction in the hope that an expiring federal tax credit would boost the market.
” ‘Any increase in demand is going to allow the mills to raise their prices,’ said Gary Vitale, president of the North American Wholesale Lumber Association.”
There are also tax regulations at play that could push the price even higher.
Look at these Random Lengths lumber market reports:
| This Week Apr 9 | Last Week Apr 2 | Year Ago 2009 | |
| Random Lengths Framing Lumber Composite Price* | $342 | $328 | $202 |
| KD Western S-P-F #2&Btr 2×4 R/L Mill Price | 300 | 291 | 158 |
| KD Eastern S-P-F #1&2 2×4 R/L, delivered Great Lakes | 382 | 372 | 240 |
| Green Douglas Fir Std&Btr 2×4 R/L (Portland) | 260 | 242 | 170 |
| Southern Pine (Westside) #2 2×4 R/L | 405 | 382 | 248 |
| KD Coast Hem-Fir Std&Btr 2×4 R/L | 317 | 305 | 160 |
| Ponderosa Pine (Inland) #2&Btr 1×12 R/L | 750 | 753 | 530 |
| * Weighted average of 15 key items | |||
This is a good story to pursue during the building and renovation season. From the person who wants to build or repair a deck, to the home builder who is just trying to catch a break after a rotten couple of years, this steep rise will hurt.
