Just about everything has become more expensive over the past year. From buying a vehicle to staying in a hotel, prices in most industries have surged.
The COVID-19 pandemic had played its part in these price increases, and while the disease wasn't always the direct cause, residual effects have led to shortages of products not just here in the United States, but around the world. As you may have noticed, the cost of lumber to build a house (and other vital pieces included in remodeling projects) is no exception.
Disclaimer: This article is not to dissuade you from remodeling your home. If you feel it’s time, then by golly, it’s TIME. One thing you can always rely on Compelling Homes for is honesty. We’re on your side, and you come first. Our team has been around the block a few times, and we’re educated, prepared, and motivated to get your project done no matter the circumstances!
Lumber prices have skyrocketed for everyone. Professional contractors and home builders alike are feeling the same pinch as someone looking to build a deck or a new fence. If you're considering a new home construction in the near future, this absolutely will impact the price. We are nothing if not honest and transparent with all of our clients, and we’d like to use this time as a teaching moment. We’re here to provide the best, most quality remodeling services to you and your family, to create better and happier homes.
We want you to feel prepared and supported through 100% of the process, so we’re here to explain a bit about the lumber fiasco, and also dive into other unexpected and lesser-known shortages or price increases that may affect your remodeling project over the next few months. To help better understand, here is what you need to know:
Here's the good news: YES. Lumber prices will go down. In fact, lumber prices are currently dropping at record rates. According to Fortune, lumber costs just experienced the biggest short-term cost drop in history.
As of right now, the cost of lumber is down around 20% since its peak price during the pandemic. The highest cost of lumber occurred on May 28, when lumber was selling at $1,515 per thousand board feet. It is now (as of the end of June) at $1,210.
That's the good news. The bad news is, the cost of lumber is still significantly higher than the price of wood at the beginning of the pandemic. In February 2020, lumber was selling for under $500 per thousand board feet and, outside a decline at the end of the year in 2020, prices continued to climb to the $1,515 point (current prices are 239% higher than spring of 2020).
Let’s dive into what this means now, then talk about the future.
As we mentioned, lumber prices are currently running at about $1,210 per thousand board feet. To put this into easier terms, every board foot you purchase will cost $1.21 – this is the base price. Treated woods will cost more, as will specialty kinds of wood like Walnut, Maple, and Alder.
A great example is using a price per sheet of plywood. Prior to the pandemic, a common pice of ½” 4’ x 8’ OSB that walls and roofs are built from would cost anywhere between $18–$24.00 each. Today, that same piece of OSB is $46.00.
At the beginning of the pandemic, wood mills were made to halt production. Companies did this for two reasons – the first being the nationally recognized mandated shutdown for nearly every industry at the very beginning of the pandemic. However, even when certain industries started back up, many in the wood industry did not, as it was believed there would have been a surplus of wood. In fact, the opposite happened.
Since people were stuck at home for months at a time, they started to buy up products from local hardware stores in order to perform at-home renovations. You may have noticed this on your social media feeds – everyone became some sort of DIY expert in 2020! From fences to decks to home offices and an assortment of other renovation or craft-like projects, people who didn't have free time before were suddenly faced with much of it and buying up wood faster than ever before.
Secondly, we experienced interest rates hitting record-level lows, which pushed the demand not only to buy current homes but for new homes as well. Many contractors saw a boom in business because homeowners wanted to update their properties, as well. All of this dramatically increased the amount of wood being used, all while the wood mills hadn't increased production. The perfect storm!
Wood mills have since started back up, but just like anything in life, this is a process that takes time. The mills needed harvesters to begin cutting down trees and shipping the trees to the mills. The cutting down and transportation process can take time, depending on the location of each. There's also only so much wood a mill can produce at once. It can't drastically increase production in order to fill needs. All it can do is run a third shift, but even then wood mills need to be constantly cleaned free of debris in order to prevent damage to the equipment and ensure the safety of their workers. Yet another perfect storm.
As we mentioned, we are seeing a dip in the prices already! With the wood mills starting to catch up with demand and new home builds and major renovations dropping off in the month of May, lumber prices have started to come down, but it might take a while to get back to what we’d consider “normal”.
Let’s talk about what other, less-talked-about pieces of your remodeling project could potentially be affected by other industry shortages and price increases.
As cabinets are made of wood, and wood is lumber, whatever is happening with the lumber industry is happening in the cabinet-making industry. We are currently seeing a 20% price increase on cabinetry, and also some timeline pushbacks. Just as we are seeing price drops and production increases with lumber, we expect this to be the same for cabinetry – what’s that old saying? Patience is a virtue?
You may have read articles about car dealerships having a low inventory of the latest and greatest models due to chip shortages from their domestic and overseas production plants alike. What you may not have heard is that dishwashers and common household appliances also utilize very important mechanisms to operate – mechanisms that have been hard to come by this last year.
We have seen, from even the big name appliance brands, a 10-month waiting list on dishwashers. Washing machines have also been causing contractors and homeowners (even the ones not remodeling!) quite the headache, due to a shortage (read: you cannot get it ANYWHERE) of a very small yet very important plastic interior piece.
So when exactly should you start your home project? The correct answer is whenever you are ready. Preparedness goes a long way in this business, just like any other. If you’re still in the beginning stages, check out our FREE kitchen, bathroom, and basement remodeling cost guides to get the ball rolling.
When it comes to the subject at hand, the answer to the question of “when” is a bit of a catch-22. In theory, the longer you wait, the lower the costs will (hopefully) be by then. The caveat to that is that many others will be thinking the same thing. Putting off your home remodeling project could cause you more frustration down the road when you realize all trustworthy design-build contractors’ schedules are booked solid.
If you can wait until early 2022 prices should have leveled back off. While the pre-pandemic prices might not ever come back (especially due to the looming inflation), you will pay far less in early 2022 than you will today. But, if you can't wait that long, every week or two you can push back on construction the lower your final lumber bill should cost. So keep that in mind, and as always, give us a call with any home renovation and construction questions you might have.
Compelling Homes is on top of the latest trends, prices, availability, and so on. We have established relationships over decades of hard work and positive results. We have the capability and practice of transparency to give you up-to-date and realistic timelines for any project you have in mind, and we promise that in the end, it will work out. We will get you that dream kitchen, bathroom, basement, or whole home remodel of your dreams.
At the expense of sounding like a broken record, our team at Compelling Homes includes some of the most trusted design-build contractors in Des Moines. Through these trying times, your home is your sanctuary – now more than ever. Contact us today with any questions, concerns, or ideas you may have, and let’s get these projects going. If we’ve learned anything over the last year, it’s to never put your dreams on hold, as you never know when the world may seemingly come to a halt.
We’re here for you, and we’re here to help! So remember, don't stop at "good enough" when it comes to remodeling your home, make it Compelling!