There was a confluence of events that caused a shortage in construction materials in 2020: lumber mills and logging operations were shut down as part of the Covid response, there has already been a shortage of truckers who are certified to haul lumber, and people have been stuck and home and therefore buying more at their local Home Depots and Lowes to mend fences, replace roofs, and build sheds. With all three of these things working together, the National Association of Homebuilders (NAHB) announced that the price of lumber has risen nearly 80% since mid-April to more than $600 per thousand board feet. Some places have seen a sheet of plywood go from $15 to $34.
It’s normal for prices to fluctuate, the NAHB says, but this is unusual, and is one of the most sustained long-term increases they’ve ever recorded.
“We haven't seen it like this before,” said Nick Keitz, owner of Keitz Construction in Lexington and president of the Building Industry Association of Central Kentucky told Spectrum News. “I primarily do remodels, so it’s not impacted me like it’s impacting the new construction guys, but it’s an issue for sure and it’s not going away until probably January at the earliest.”
Other products that have seen increases include pressure-treated wood to build decks, which has gone up from an average of $35 per piece to $65.
One possible culprit has been a decision to use vacation money, that families can no longer use, on remodeling the home. Tariffs on material from overseas are also contributing.
This could be especially damaging to builders who have already signed contracts, pre-Covid, with price estimates that could not have foreseen the change in price. The contractors could see a big hit to their bottom line if they can’t renegotiate.