Rising timber prices in a context of low supply and labor disputes
Lumber prices are on the rise again as supply tightens, residential construction projects accelerate and the United States prepares to double tariffs on lumber Canadian.
That means house prices will stay higher, Bloomberg reported, noting that lumber futures this week are about double pre-pandemic levels. Supply is tightening in both British Columbia and the southern United States, two key sources for the country.
British Columbia sawmills slowed production as the government-adjusted log cost quadrupled earlier this month compared to a year ago. Labor disputes and labor shortages in factories in the south, reflecting low wages and unsafe conditions, are also reducing supply.
Wood futures have been volatile since the start of the pandemic. The high prices even forced some home builders to stop work.
The manufacturers largely passed the prices on to the buyer. The average price of a new home in the United States rose to as high as $ 40,000 earlier this year during a spike in lumber costs.
Prices rose steadily in the first half of the year, peaking in the spring and declining even faster, reaching 2021 lows in August as supply skyrocketed.
Futures have since started to rise again.
“We are seeing a rise in futures prices, and that will undoubtedly mean that the purchase price of retail lumber builders will increase,” said Jerry Howard, CEO of the National Association of Home Builders.
Brian Leonard, analyst at RCM Alternatives, expects prices to rise in the first quarter of next year.
Even though prices fell earlier this year, home builders took advantage of strong demand for homes and kept prices high. Rising interest rates, inflation and rising house prices could help counter price volatility.
[Bloomberg] – Denis lynch