Home improvement projects......have you seen the cost of lumber?
A common thought I have been hearing of late, so I though I would shed some light on the topic for you. Actually, with the help of our portfolio advisory group, we have identified some of the causes for you.
- According to the Financial Times, lumber futures have increased over 50% year-to-date and over 400% since the pandemic low to more than $1,327 per 1000 board feet length.
- Back in 2018, the previous high was $650.
- since 90% of all US homes are wood frame builds, it is estimated (National Associate of Home Builder) that the price of a single family home build has jumped by $24,000??!!
- When it appeared that demand was going to wane last year, orders were reduced, dropped.....then demand exploded putting huge pressure in the other direction and thus a whopping increase in prices.
While this is primarily a US centric story, it can be translated to our own backyard. The odd thing that stands out to me though is our exports to the US (lumber) are still quite low due to tarrffs so we should be faring a little better.
Anyway, maybe the expression will change soon --- "They got taken to the composite shed"........