With Spring well underway, it is once again time to take a look at the state of the lumber market. The trends that persisted throughout a record-shattering 2020 have not reversed or slowed down for much of the year as some experts anticipated. However, there has been a gradual slowing very recently that may finally indicate a calming market ahead. Let’s take a look at the lumber forecast for Spring 2021.
By all accounts, 2020 was a shocking year for those in the building material industry, both on the supply and consumption sides. Record highs continued being broken month after month. However, due to the seasonal nature of the building industry, and supply chains rebounding from pandemic related-delays, closures, and understaffing, many industry experts predicted prices would level out and products would be easier to come by. This has not been the case thus far this year. In fact, on May 10th, prices for lumber products hit an all-time high at a record of $1,711 per thousand board feet, and over 200% increase from lumber prices the same time last year when the lumber boom began. Prices continue to rise despite the fact that production shortages have reversed, with February seeing a 13-year high for lumber production. These staggering numbers lead some experts to believe that even if prices go down, they may not fall to pre-boom costs anytime in the foreseeable future.
Calmer Waters Ahead?
While high prices are expected to persist at least through summer, there is some hope that calmer waters are ahead. Following the all-time high seen on May 10th, the prices for lumber futures saw a day-to-day decline every day since. This is encouraging news to builders who are hoping for more pricing stability in the near future. However, due to consistent demand at least through the summer season, the declining futures prices are more indicative of hopeful shifts at least a few months out instead of within the next few weeks.
What Impacts Does This Boom Have On the Industry?
Aside from high prices, issues are primarily existing in the industry right now due to sky-high demand. Mortgage rates continue to remain low, and with homebuyers anxious to take advantage of these rates, home builders are striving to keep up with demand. While production is strong, shipping materials has been a challenge that is creating more delays to get products to distributors. Trucking agencies are experiencing staffing shortages leading to slower deliveries. This issue is compounding with demand to create a perfect storm of high prices and low availability. And all these challenges come as the industry enters its busiest period in the summer months.
What Steps Can Builders Take?
Delays are an inevitable reality of the current state of the market, but they can still be mitigated. Our best advice is for builders to keep lines of communication open with the National Lumber team to ensure we can best meet your needs. Right now, no amount of time is too early to start planning your pr0ject and coordinating orders for the materials you’ll need to get the job done. Our team is working hard to get you the most up-to-date estimates possible and provide delivery timelines with as much accuracy as we can feasibly manage given the current state of the market. By starting early and communicating often, we can help make sure that your projects can continue uninterrupted.