The year 2020 was unprecedented in many ways and we could be experiencing the impacts of it for months or years to come. The coronavirus pandemic and the associated shutdowns created so much uncertainty regarding supply and demand and companies simply didn’t know what to do at times. This is particularly true when you look at the lumber industry. It was largely believed that economic uncertainty would slow down purchases, but that was not the case when it came to residential home improvement.
The pandemic and staying at home led to people wanting to start new woodworking hobbies or finally getting around to the residential home improvement projects they’ve been putting off for years. As a result, the demand far exceeded the supply for lumber and has forced prices to increase. It appears the spike in prices might be behind us, but the price of lumber is still at historic highs. We’ve examined how we got here and where we can expect the price of lumber to be in the near future.
Why Lumber Prices Spiked So Much
The number of residential home improvement projects across the country increased significantly during the lockdowns. These residential home improvement projects included new room additions, roof repairs, deck and patio construction, and much more. Sawmills simply could not keep up with the demand, especially considering they were often short-staffed because of the coronavirus spread. The only way the industry could slow down the demand enough to catch up is to increase the prices and that’s exactly what happened.
At its peak price, lumber skyrocketed to roughly five times higher than it was in March 2020, before the pandemic began. The good news is that, unless there are other unpredictable circumstances that occur, we have already experienced the spike in lumber prices and now should see the prices fall. The biggest question is how quickly will the prices decrease and will they get back to where they were pre-pandemic?
Contributing Factors To Lumber Prices Falling Today
Any general contractor in Chicopee, MA will tell you that you can’t point to a specific factor that has led to lumber prices falling. Numerous things are happening simultaneously to drop the prices, which is promising if you think about prices falling quickly. One of the biggest factors is sawmills are mostly operating at full capacity now and can increase production as a result. Production is expected to remain at high levels with the widespread availability of the vaccine, so sawmills shouldn’t have to shut down if they experience a virus breakout.
Another factor is homeowners are slowly returning to the office either in a full-time or part-time capacity. Typically, the more time you spend staying at home, the more money you will spend on residential home improvement projects. So when people return to the normal grind at the office, deck and patio construction and other similar projects will slow down.
Another factor that any general contractor in Chicopee, MA will say can’t be overlooked is that homeowners simply can’t afford to do the projects they want. There might still be some uncertainty with their jobs or they may have been forced to take pay cuts during the pandemic. Or with the inflated lumber prices, they might simply not be able to afford any residential home improvement projects and will have to put them on hold until prices drop more.
Lumber Prices Will Remain Above Pre-Pandemic Levels For A While
Every general contractor in Chicopee, MA expects lumber prices to remain above pre-pandemic levels for the foreseeable future, even though the spike may be behind us. One of the reasons is because when prices start falling, homeowners might be anxious to begin their residential home improvement projects so we could experience high demand again.
One factor that favors lumber prices falling is that residential home improvement projects typically slow down when we enter the fall and winter months. With fewer deck and patio construction projects, new room additions, and other projects requiring lumber, sawmills will have a chance to catch up even though it will take more time for them to get ahead.
Whether lumber prices fall to pre-pandemic levels remains to be seen. It’s hard to predict how many homeowners will continue their residential home improvement projects once prices continue falling. And then there’s the factor of new home construction projects that might have been put on hold because of the spike in lumber prices. Those factors could make the decline in prices be a long and slow process, but the good news is supply is expected to remain at high levels going forward.
Phil Beaulieu & Sons is here for you whenever you’re ready to tackle your next residential home improvement project. We understand the high lumber prices may have put a damper on your new deck and patio construction project this summer, but we are slowly moving away from the spike in prices. The trends are looking promising even though we might not reach pre-pandemic prices. Whenever you’d like to receive a free quote for your next residential home improvement project, contact us and we would be happy to help in any way we can.