Why Are Lumber Prices So HIGH in 2021?

As a woodworking and someone who works with lumber and purchase lumber every week. I have the answer and data/sources to back up my answer. The answer to the question; Why are lumber prices so high in 2021 and it is because of the following factors. Let me explain!

Here is a video I made talking about why lumber prices are so high and are they going to come down any time soon! 

Reason 1:

COVID19 has played a large role in the reason why lumber prices are so high. There was a 30% decrease in lumber production in 2020 that lead to a 188% increase in lumber prices. The home building supply chain is messed up. It used to take 1-3 weeks to get a window now it takes 16 weeks – Source

Reason 2:

Home loan interest-rates are at historic lows. Homeowners are refinancing, pulling out equity and or getting new loans to do home improvement projects or build new homes. I know as a woodworker and carpenter my products and services have seen 2-3x growth over the past year. – Source

Reason 3:

Good old supply and demand. Home prices have increased by an average of 25k. This is because the cost to build has gotten very expensive due to raw material costs going up. Minimum wage in a lot of states has increased to $15 and all these costs are passed down to the customer. There isn’t enough homes new or old on the market. – Source

This is a question I get asked a lot as a woodworker and carpenter. Do you see the price of lumber going down any time soon?” Well my answer is simply no. I do not see the price of lumber and raw materials going down any time soon. With companies not operating at full capacity for over a year the production and processing of these raw materials has simply not been able to catch up. There is and continues to be a massive ripple effect on the supply chain. I believe we arel at the beginning stages of this wave and there are many more waves coming.