No ease of lumber price spikes in sight

It’s been a wild ride in 2020 for the U.S. timber industry, and the run up in prices shows no sign of easing.

First, mills temporarily shut down in March due to the COVID-19 pandemic. Then, in September in the timber nexus of the Northwest, wildfires have burned out of control threatening some timber plants.

After the COVID shutdown, homebuilders embarked on a surge of new house starts, while many homeowners took on home repairs and remodeling jobs during quarantine. The result has been a dramatic spike in demand accompanied by a supply shortage.

Lumber futures have climbed 50% this year, with prices on pace for the largest gain since 1993. The fires have prompted logging bans, closed railroad lines, and shuttered mills. Lumber commodity prices are expected to continue to be high well into 2021.

The average price of a new multifamily home has increased by $6,107 from mid-April to August due to higher material costs.