FOLLOWING the pandemic, lumber prices increased in price across the US leaving many businesses facing a potential shortage.
Here we explain why lumber is so expensive and whether there is a shortage of the raw material.
Why is Lumber so expensive?
As the pandemic caused devastation to the US economy, many sawmills had to shut down lumber production with an expectation that there would be a slump in the housing market.
However, that slump never arrived and now there isn’t enough lumber to supply the housing market which grew again post pandemic.
As a result, lumber became a sought after commodity with demand outweighing supply.
This meant that the price of the material soared during the 13 months after the pandemic, with an estimated growth of 500%.
According to Vox, the price of Lumber used to be range from $200 to $400 for a 1,000 board feet.
Now those prices have soared to well above $1,000.
Furthermore, estimates suggest that the roar materials increase by 500% since April 2020.
As reported by CCN, the lumber shortage is costing many prospective home buyers even more money.
Surging lumber prices alone pushed the price of an average new single-family home $35,872 higher, according to an analysis by the National Association of Home Builders.
"While lumber prices have gone up, we have been able to pass it on to the consumer with higher prices for homes," Jeffrey Mezger, the CEO of KB Home (KBH), said.
"And there is still far more demand than there is supply."
Is there a shortage of lumber?
The USA faced a lumber shortage in May 2021 with a number of industries affected.
Brant Chesson, the president and CEO of Homes By Dickerson, a Raleigh, North Carolina-based home builder said: "I've never seen anything quite like this."
Chesson said his company would love to build more homes to meet surging demand but currently it can't find the materials, or labor to do so.
He added: "It's absolutely contributing to a shortage of housing."
CNN further reported that independent builders are feeling the pain as they struggle compete with bigger construction companies.
This was a direct result of a shortage of lumber.
Speaking to CNN, Tom McCarthy, a real estate broker, estimates the cost of lumber for the home will hit $70,000, nearly double the cost of building the exact same home in a nearby town just eight months ago.
Furthermore the shortage, coupled with the price boom, was so extreme that builders reported having lumber and other raw materials stolen from their construction sites.
One builder said: "Theft has been huge in our market. We have tens if not hundreds of thousands of dollars stolen during the year."
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