Published August 3, 2021

What’s Behind Rising Lumber Costs?

Written by René Ahmad

What’s Behind Rising Lumber Costs? header image.

Here’s how rising lumber prices have impacted our real estate market.

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What’s going on with lumber prices? How are they affecting the real estate market?

Due to COVID, lumber prices have nearly tripled in the past year. If you’ve tried buying a 2x4 or a piece of plywood from a home goods store, I don’t need to tell you that prices are crazy. This increase in lumber prices has added anywhere from $30,000 to $300,000 more to the cost of building an average home, depending on its size.

In some ways, this has helped the market; rising prices benefit sellers. However, as a result, many people are wondering if they should renovate their existing homes rather than build a new one or simply buy a resale home and make renovations to it. If you’ve been calling contractors or anyone to do renovations on your property, you’ve probably found that they’re backed up and can’t come for weeks or months at a time.

"Here’s how rising lumber prices have impacted our real estate market."

The good news is that lumber is a commodity, and the trendlines show that prices are beginning to level off; It’ll be interesting to see if this dip will translate into lower construction costs over the long term. In more good news, lumber supply is steadily increasing. During the thick of the pandemic, lumber mills were shut down, creating a huge imbalance between supply and demand. In some cases, when mills opened back up, they only opened at 30% capacity, which put a lot of pressure on the new construction market.

If you’re thinking about selling your home and buying or building a new one, reach out to us. We’re always on the lookout for new inventory, and we’re getting fantastic sale prices for our clients in today’s market. If you’re a buyer, my team and I can help you by finding off-market deals.

Also, don’t hesitate to contact us with any questions you have about rising lumber prices or the real estate market in general. We’d love to help you.