Columnists, V7I1

Lumber Prices Head Back Up

(Photo courtesy of Karolina Grabowska from Pexels)

Lumber prices reversed course yet again and headed quickly back toward levels seen last summer. 

Producers of Southern Yellow Pine and Spruce Pine Fir, the main species of softwood building material, were unable to keep buyers supplied with their ongoing and future needs. Order files grew rapidly, and mills raised prices for more than six consecutive weeks at mind-numbing rates. 

As of mid-December, many mills quoted lumber for late January delivery. 


Additional fiscal stimulus, historically low interest rates, and the first COVID-19 vaccine shipments gave the housing market and the home improvement sector a bullish tone.  

Strong readings on November housing starts, 1.5 million, and permits, 1.6 million, provided evidence of a sustainable housing recovery. 

However, supply-chain constraints for lumber and distribution, complicated by the health pandemic, added to the surging market price for lumber.     


Consistent lumber demand and underwhelming supplies at mills and the distribution system elevated prices. 

SYP 2 by 4 #2 prices were 40% higher over the previous three weeks. Canadian Western and Eastern SPF 2 by 4 #2 and better prices gained more than $240 per thousand board feet in the same period. Premium grades in both species moved in sympathy with #2 prices. 

Studs prices increased more than $170 per thousand board feet following strong demand from home centers and lumberyards.  


While most lumber prices looked insanely expensive back in August, it just may have been a precursor of what is to come.  

It is now much more likely the first quarter of 2021 will be a strong market and a resumption of the upward lumber price trend from last summer. 

The risk for builders is running out of material, not overpaying for lumber.  

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