You’ve likely heard about (or noticed) the fact that lumber prices are very high right now—and it’s not unrelated to DIY home renovation.
So if you are in any stage of a home renovation project where you were expecting to buy wood in the coming months, what are your options?
Background: Rising Lumber Prices During COVID-19 Pandemic
By now it is clear that, pretty much as soon as the pandemic hit, the lumber supply chain began to be disrupted in a serious way—at exactly the time when the world’s DIY and construction businesses made a run on the material.
A story that ran in Popular Mechanics explains the story of pandemic lumber prices nicely with an eye to the DIY-er. In March, the National Association of Homebuilders reported on it and then helped rally 35 trade organizations to urge the US government to assist with the issue. Just in the past month it’s been reported on by news outlets on all levels, from magazines like the Financial Times and Bloomberg to local news in Iowa, Michigan, North Carolina, Maine, Hawaii, and elsewhere.
The Short Story on Pandemic Lumber: A Run on Wood, A Backed-Up Supply Chain
With the world’s middle class stuck at home, people (like you, maybe!) turned their attention to DIY home improvement projects of all kinds. And for those who had not lost their income source, the limited options for leisure meant there was actually a cushion in the budget not being spent on restaurants, vacations, amusement parks, or live entertainment.
At the same time (in the US at least), two things happened that made the homebuilding industry, for their part, snap up all the lumber they could get. First of all, the Federal Reserve slashed interest rates so that borrowing money to buy a house became historically low. And secondly, in the ferocious words of one NPR piece:
Many Americans — especially 30-somethings who remain employed — are ditching their tiny rental apartments in hip districts of expensive cities and moving to buy houses in more affordable cities or the burbs for a life of shopping at Home Depot and spending their Friday nights eating mozzarella sticks at Applebee’s.
So home prices shot up with all these motivated new buyers, and with the scarcity of homes, there was high demand to build new ones.
Hence, DIY-ers and contractors alike were heading to the lumber yards, all over the place.
However, the massive danger of the novel coronavirus meant that the physical work needed to produce and ship lumber was severely hampered. As with many industries, everything involved in getting usable lumber to homeowners who want to do DIY renovations (or anybody else) has just been taking a lot longer.
By this point, more than a year into it, the world’s supply of usable lumber is dramatically depleted.
Forecasts: When Will Lumber Prices Drop?
The main consensus seems to be the end of the 2021 calendar year.
The Bloomberg article Sky-High Lumber Prices to Drop by Year-End, Analyst Says is self-explanatory about that.
An article that ran in the Mahoning Matters paper covering northeastern Ohio talked to one economic researcher who’s optimistic (if 18 months counts as optimistic), and more than one lumber industry professional who expressed serious doubts that prices would ever return to their pre-pandemic course.
The Financial Times story cites a market analyst predicting supply could increase by 5-6% by the end of the year, which presumably would alleviate the bottleneck a bit.
Best Options for DIY-ers During the Current Lumber Squeeze
If you’re thinking about what to do under these circumstances and with the uncertainty of prices in the future, an article in Popular Mechanics has got some tips for you. That writer throws out a few ways to think about this.
If you need tips on what to consider when buying wood for DIY projects in general, you might want to check out the Beginners Guide to Buying Lumber over at the Houseful of Handmade. It could help you gauge how much wood you truly need for which projects and how big you should plan to go.
And you might be able to get some tips from this post on the blog of payment processor tech company Levelset—aimed at professional contractors, but very relevant to cost and ROI in the short term.
As with many aspects of markets, it remains to be seen whether lumber has simply taken a permanent leap up in price, or whether it will subside back to the course it was on before 2020.