The US Lumber Market: A Return to Normalcy?

As readers of this site will note, the shortage lumber – and its high price when available – was a completely unanticipated (and unpleasant) result of the COVID-19 pandemic. For more than a year, consumers have had to contend with this double whammy, which has:

• added to the purchase price of new homes  at a time when a lack of affordable housing was a major concern
• delayed the construction of new homes, which were already in short supply before the pandemic hit
• lengthened the time needed to complete home improvement projects, causing frustrations to both contractors and DIYers alike

However, a recent article indicates that the great lumber crisis that accompanied the pandemic may soon be coming to an end. First, nearly half of lumber dealers surveyed – after months of shortages – reported that they had excess lumber in stock, and nearly a third claimed that they had normal levels of inventory. Second, lumber prices have fallen dramatically, reaching about $500 per thousand board feet – a level just slightly above that of lumber prices prior to the pandemic.

This sudden turnaround in the US lumber market will be a boon to the US economy as it rebounds from the effects of the pandemic – provided lumber prices remain low and supplies remain high. A ready availability of less costly lumber could provide a further boost to new home construction (adding to a tight supply of available homes for purchase) while also encouraging homeowners considering large-scale renovations (such as the ever-popular kitchen and bathroom remodeling, or adding a home office) to undertake them. Not only will this continue to fuel demand for lumber and other building materials, but the economy will be further stimulated by the thousands employed in the construction trades, building and renovating homes.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly such studies as Lumber, as well other studies in the Construction and Building Products and Consumer Goods areas. Freedonia Custom Research is also available for questions requiring tailored market intelligence.