TIL: Lumber prices are absolutely skyrocketing (up 232% since the pandemic and still rising) [Up2: Back down]

[Deleted member 31923]

Last week the price per thousand board feet of lumber soared to an all-time high of $1,188, according to Random Lengths. Since the onset of the pandemic, lumber has shot up a whopping 232%.

Home builders and DIYers don't want to hear this, but the ceiling could be higher—maybe even a lot higher. On Monday, the May futures contract price per thousand board feet of two-by-fours jumped $48 to $1,420. That squeeze once again triggered the circuit breakers and caused lumber trading to halt for the day. Why would lumber yards and builders pay above market rates? Severe lumber scarcity has buyers on edge. They're buying the sky-high contracts in order to ensure they'll actually get the lumber they need for projects already under contract.

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"The market is in trouble. It could spiral out of control in the next few months," Dustin Jalbert, senior economist at Fastmarkets RISI, told Fortune. The issue? Supply, which is already backlogged, simply can't catch up as demand continues to grow with the start of the home building and home renovation seasons.

This supply and demand mismatch is largely a result of the pandemic. At the same time that state-mandated lockdowns caused mills to halt production, bored quarantining Americans were rushing to Home Depot and Lowe's to buy up materials for do-it-yourself projects. That caused lumber inventory to plummet. It only got worse from there: Recession-induced record-low interest rates caused a housing boom. In March, new housing starts hit their highest levels since 2006. Of course, new homes require a lot of lumber, thus exacerbating the shortage.

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Lumber prices are up 232% and ‘could spiral out of control in the next few months’

Lumber supply, which is already backlogged, simply can't catch up as demand continues to grow.

finance.yahoo.com

I didn't realize this was happening until someone mentioned that this is not a good time to build a house or do any add-on projects involving lumber because of the prices skyrocketing. This also explains in part while home prices keep rising. Anyone looking for home building or DIY projects and face this roadblock?

 

[TheGhost]

Yeah imagine my surprise when I wanted to put up a cheap stockade fence and found out the PVC fences were actually cheaper. Insane.

 

[Deleted member 5359]

When the price of everything goes up we need to start recognizing it for what it is: inflation.

Get ready for higher grocery bills for the rest of the year

The latest spike in grocery bills comes on the back of prices that rose during last year's pandemic stockpiling — and never went down.

www.nbcnews.com

 

[Xando]

It's not only lumber. It's almost all commodities.

Copper hit 10k today for the first time in a decade

 

[Deleted member 7148]

I had my roof replaced a month ago and it cost me around $2k more than it should have just because of the skyrocketing cost of materials. Now is a terrible time to get work done to your house because of this. I would have personally waited but the roof was super old and there was a leak in my roof and no one could find the origin of it, so it had to be done.

 

[BringBackSonics]

We just got a quote to replace our fence. Yeah, I'm going to ducktape that thing together and wait for the market to correct itself.

 

[Lobster Roll]

Those lumber costs are also affecting the housing market in general. We were lucky to get an offer accepted on a house that we bid several thousand dollars over asking to obtain. The squeezed inventory isn't going to be alleviated overnight, and the soaring cost of lumber is a huge factor for that. The housing market is insane right now and will continue to spiral into crazyville.

 

[J_Viper]

Damn, I am trying to upgrade my weapons in Yakuza

 

[Deleted member 26039]

Timber companies here in Oregon are screaming about a lumber tax when they are making record profits. Fuckers.

 

[LuigiMario]

Yep I am acutely aware of this as I bought a house last summer and hoping to get a privacy fence put in the backyard this summer. Sucks a lot!

 

[The Albatross]

Yeah it's fucking crazy around here too. We wanted to redo our deck on our house which is very old, replace it and expand it, and the quote was $29,000. I was expecting like $15k-20k max.

 

[Griselbrand]

Price of steel has also gone up. Lumber and steel costs coupled with cement shortages is hitting our industry.

 

[BriGuy]

We just had our basement finished and the builder was lamenting how much more the materials cost since we signed the contract last Fall. We got lucky because he said he's going to have to add a clause to account for price increases in all the future projects he's involved with.

 

[skeptem]

When the price of everything goes up we need to start recognizing it for what it is: inflation.

Get ready for higher grocery bills for the rest of the year

The latest spike in grocery bills comes on the back of prices that rose during last year's pandemic stockpiling — and never went down.

www.nbcnews.com

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As someone working I the grocery biz, p on our end have been going up for a while but we have been eating most of it. I wouldn't say it's just inflation, because most of the time that we see it is because of low supply available.

 

[Finale Fireworker]

We just got a quote to replace our fence. Yeah, I'm going to ducktape that thing together and wait for the market to correct itself.

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Will it, though? That's my big fear.

 

[SpottieO]

We had a new privacy fence installed at the beginning of the pandemic. Thank god we didn't wait until now.

 

[Tapiozona]

When the price of everything goes up we need to start recognizing it for what it is: inflation.

Get ready for higher grocery bills for the rest of the year

The latest spike in grocery bills comes on the back of prices that rose during last year's pandemic stockpiling — and never went down.

www.nbcnews.com

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But this is a 230+% increase in a matter of months, not inflation

 

[BringBackSonics]

Will it, though? That's my big fear.

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Our fence guy basically told us to wait if we can, that it should come back down. We've heard the same thing from a couple of fence companies as well. I hope they know.

 

[Goldenroad]

The stupid thing is, based on info from a guy I know who owns a lumberyard, lots of builders have been stockpiling lumber for fear of the prices going up, but the stock piling is a large part of what is driving the prices up.

 

[Euler007]

Will it, though? That's my big fear.

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It will if they stop QE and let the market set interest rates.

 

[Netherscourge]

Decks and sheds are gonna be pricey.

 

[Indy in the Fridge]

We did a bathroom renovation a couple of months ago when lumber prices dipped slightly but compared to 2019 it's crazy expensive.

 

[Xando]

It will if they stop QE and let the market set interest rates.

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So not before 2023

 

[Joni]

It is quite annoying because custom built costs is the last thing I need for my new home,and they are impacted by shortages. The price is signed so that is fine but I'll need to wait.

 

[BringBackSonics]

I just got my roof certified for another 5 years...man its going to be expensive to replace my roof lol

 

[kess]

Decks and sheds are gonna be pricey.

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[Desi]

yeah couldn't get a deck last year and looks like I wont' this year either.

thank god I have a covered front patio away from the street.

 

[BringBackSonics]

I wonder if Composite (Trex) might actually be cheaper then regular wood? Might be worth it due to durability, even if initial cost is a little higher. Made our deck out of trex

 

[Euler007]

So not before 2023

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Allegedly.

 

[Lube Man]

Yep. Used to be $2/lumber. Now it's $12/lumber. My workplace consumes Lumber by the ton.

 

[Deleted member 24907]

Brick houses let's GO 👏

 

[Mathieran]

Yeah we were looking at putting a shed up in our back yard but the price doubled very quickly so we put that on hold.

 

[samoyed]

This is mostly supply disruption and rapidly shifting consumption habits, I think.

 

[rsfour]

Yeah, was putting a fence for a neighbour, because their original one got knocked over by a storm last year. Prices are crazy.

 

[AlteredBeast]

It'll come back down once the home building market decreases, which these increase in prices will help, too lol

 

[LycanXIII]

I started working at Lowe's last March before lockdowns started. At the time OSB was $8 a sheet. It's currently $40 a sheet.

 

[thewienke]

This is mostly supply disruption and rapidly shifting consumption habits, I think.

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That's my guess.

Have to consider that after the entire economy was mostly shuttered for an entire year, suppliers are basically trying to meet two whole years worth of demand in one year without additional capacity. The effect is likely worse for something like lumber that has a substantial production lead time.

 

[Grimm Fandango]

Has this impacted furniture places like Ikea and price increases? They use tons of wood.

 

[Servbot24]

Decks and sheds are gonna be pricey.

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Yup, we're contracting a deck now and the price is not easy to swallow

 

[Whitemex]

So I shouldn't go to Home Depot to buy just a plank of wood and be proud of it?

 

[Thebox]

I wonder if Composite (Trex) might actually be cheaper then regular wood? Might be worth it due to durability, even if initial cost is a little higher. Made our deck out of trex

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I wonder also. We used trex for our deck 3 years ago. Don't have to worry about rot or staining it. It's definitely worth it to me.

 

[Sir Garbageman]

I wonder if Composite (Trex) might actually be cheaper then regular wood? Might be worth it due to durability, even if initial cost is a little higher. Made our deck out of trex

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That was going to be my question. Does this include composites?

 

[Teh_Lurv]

There are about a half dozen houses in my neighborhood undergoing renovation that have slowed to a snail's pace. The house across from me that partially burned down back in 2019 still hasn't completed renovation. A neighbor whose is renovating her entire house that was supposed to have been ready to move into in Fall 2020 still is no where finished today.

 

[mjc]

The price of a lot of material goods are spiking, and will continue to do so. Across many industries. 2021 is gonna be rough as fuck.

 

[Joe2187]

I just wanted to make a garden bed....

Im just gonna end up finding some pallets and treating it with some water sealer

 

[Mcfrank]

Worried about my kitchen remodel we are planning.

 

[BringBackSonics]

Worried about my kitchen remodel we are planning.

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Yup. We have that as well. Not sure how much wood that will take though.

 

[Torpedo Vegas]

They quoted me 18-20k to do a fence around my backyard. My yard isn't that big.

 

[Mcfrank]

Yup. We have that as well. Not sure how much wood that will take though.

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Got a cabinet quote from Home Depot already which was in line with what I expected, but working on a quote from a local GC/vendor as well right now as I would rather not spend that much at Home Depot if I can avoid it.

 

[Cat Party]

Worried about my kitchen remodel we are planning.

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Yup. We have that as well. Not sure how much wood that will take though.

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We're getting our kitchen floor redone and the big plywood boards they put down on the subfloor used to cost $12 each but now cost $50 each. Thankfully they only needed 4 of them. Glad we're not doing cabinets.