A Perfect Storm Of Factors Has Lumber Prices Out of Control

If you're in the process of building a house, been considering an addition to your home, or getting repairs done following last summer's derecho, you know that lumber prices are nothing short of ridiculous these days. It's one of the factors that I believe are driving up sale prices on homes... most people simply can't afford to build one right now.

What's Causing the Increase?

Prices have gone through the roof because of a shortage, caused by a number of factors. During the pandemic, as more people spent time at home, everyone seemed to decide it was the perfect opportunity to do a home improvement project. The parking lots at Lowe's, Menards, and Home Depot always seemed to be full for months on end.

As demand was growing, KCRG reports there were also disruptions in the supply chain, caused in part by plant shutdowns.

Here in eastern Iowa, the August 10 derecho that left widespread, unprecedented damage just made the problem worse.

Specifically, owner Douglas Ayers of D&N Fence Company in Cedar Rapids says his company took over 8,000 calls after the storm hit. He told KCRG, "We’re totally swamped. If you called today for a new fence, it would be... we’re into November already for residential... The wood is just, almost impossible to find.”

How Much Higher Are Wood Prices?

Tim Gordon who owns Gordon Lumber Company in Mt. Vernon says giving price quotes is very difficult because prices are changing so quickly. He says wood prices are triple what they were before the pandemic began 13 months ago.

A friend of mine is building a house and he backs up the increase in wood prices. He told me, "Our lumber quote before the derecho was less than $100,000. Months after the derecho it was $270,000."

Is There Relief In Sight?

How long will the high prices last? It could be a long time according to Gordon: "The mills are back up and trying to operate at a certain capacity and just can’t keep up with the demand."

For those in the housing market, that will probably continue to mean incredibly high demand and more costly prices for existing homes. However, compared to the cost of building a new home, even if you are able to get the materials, moving to an existing home is definitely the way to go for most Iowans. The only question is, for how long?