In 2021 we saw the housing industry boom, despite the global pandemic. The lumber industry, however, suffered. The demand for lumber was high but a lack of supply, along with an increase in tariffs, created tremendous inflation. 2021 saw the highest increase in pricing for lumber since 1949. So, what does this mean for lumber prices in 2022?
According to the National Association of Home Builders (NAHB), increasing lumber prices are adding approximately $30,000 to the price of a new home. This is only adding to the insane increase that real estate has seen this year. The market can not bear more in the form of construction slow-downs. Already, 152,0000 single-family homes have been permitted but not yet started, this is a 43.4% increase from last year.
What is Being Done About This?
The NAHB is taking the lead on this issue, and recently wrote a letter to President Biden. In this, they urged President Biden to direct the U.S. Trade Representative Katherine Tai to develop a new softwood lumber agreement.
“In addition, we respectfully ask that you direct U.S. Trade Representative Katherine Tai to returns to the negotiating table with Canada to develop a new softwood lumber agreement. Ending softwood lumber tariffs once and for all would be a significant step forward in addressing the longest trade dispute in U.S. History.”
The housing demand is strong and residential construction is expected to stay at its current pace through 2023. This makes it imperative to resolve the issue of lumber prices.
In addition to the letter, the NAHB met with top Canadian officials, to discuss the Commerce Department’s recent action to double tariffs on Canadian lumber imports. This would increase tariffs from 9% to 18% which threatens housing affordability in the US.
What Does This Mean for Lumber Prices in 2022?
In the early months of 2022, expect to see lumber prices increasing again. Back in May of this year, lumber prices peaked at $1,515 per thousand board feet. We did see a slight decline for a few weeks however, the price is starting to steadily increase once again.
All in all, a change needs to be made to make lumber more accessible and affordable in order to keep up with the high housing demands. Use the Dibbs app to ensure you are getting the best price from suppliers on lumber and additional materials. Learn more about the features of Dibbs here.