The price of lumber saw a more than 60 percent increase nationally as of the end of June, driven by a combination of a new spurt in home building, as well as individual home renovation projects.
According to the financial data company FactSet Research Systems, the share price and market index for lumber products has more than tripled since April, the first full month of the COVID-19 economic shutdown.
Overall, the price is now at its highest level since early 2018.
“Hardware stores are selling a lot more of it than brokers expected, as folks stuck at home tackle those long-postponed projects,” notes the financial news service site Marketplace.
The swift comeback in homebuilding, after seeing an initial decline this spring, has also spurred the demand for lumber, with the National Association of Home Builders reporting a national increase in housing starts of 4.3 percent in May.
That percentage represents 974,000 new projects, over 934,000 from the month before.
The lumber market has additionally been bolstered by the fact that many mills ceased operations earlier this spring as a result of local stay-at-home measures, leading to an inevitable decline in supply.
Even more, the mills that did remain open reduced production, anticipating an ongoing decline in home building.
In a statement released by the NAHB it is also noted that “suppliers continue to catch up to orders to the point that, in some cases, builders and traders are being forced to place orders without a delivery date or price.”
Treated wood is particularly hard to come by, with retail supply giants Home Depot and Lowe’s reporting that new shipments are often sold out within hours.
Analysts, noting not just the explosion of home renovation projects, but also the increased need for wood as a result of bars and restaurants building outdoor fenced-in deck spaces, say they expect the higher lumber prices to remain intact at least until fall.
By Garry Boulard
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