Lumber prices are on yet another run.
Last week the cash market price of framing lumber climbed a weekly record of $129), hitting $915 per thousand board feet. That price is up 50% this month, and up 135% since lumber bottomed out at $389 per thousand board feet in August. It’s also the highest price that buyers have seen since the so-called “lumber bubble” this spring—when the price topped out at $1,515 per thousand board feet.
The good news for buyers? There’s a few week-delay between shifts in the wholesale price and the retail price. Simply put: There’s still time to buy before this spiked wholesale price is fully priced into the aisles of major retailers like Home Depot and Lowe’s.
“Prices will start rising very quickly on the retail side to catch up…If you need wood for the first quarter and can afford to buy it now, then no need to wait,” Andy Goodman, CEO of Sherwood Lumber, a national wholesaler of building materials, recently told Fortune.
The lumber bubble this spring was spurred by a supply decrease and a demand increase. Production got behind during the lockdowns and struggled to catch up as both demand from DIYers and homebuilders soared. Eventually, it got sorted out this summer as sawmills upped production and DIYers got priced out of the market.
This go around is a bit different.
A record rainfall last month in British Columbia—the epicenter of North American timber—damaged the road and transportation network in Canada’s westernmost province. That chaos also worsened the bottleneck at the Port of Vancouver. As a result, lumber shipments are backed up and simply can’t match the strong demand from homebuilders nor the late 2021 demand surge for lumber as buyers try to lock in prices before U.S. tariffs on Canadian softwood double next year. Cue the latest price run.
“Prices have been running up sharply again, with gains akin or even sharper than last spring. There are some timing differences in play though. The early year run was moving into the prime building season, whereas we are currently heading into the winter months. Buyers have needed coverage, but they have purchased heavily in recent weeks (past two months), and may be content to sit back and wait out the holidays and see what Mother Nature has on tap this winter in terms of the weather,” Shawn Church, editor at Fastmarkets Random Lengths, told Fortune.
Looking ahead, the big question is what will this lumber run will look like come spring 2022—that’s when homebuilders ramp up into their busy season, and demand tends to spike.
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