Lumber prices to extend surge as North America shortfall deepens

Marcy Nicholson, Bloomberg News

North American lumber prices will extend gains this year as homebuilding and renovations cause demand for wood to outstrip production, according to Forest Economic Advisors LLC.

“Production is going to have a hard time keeping up with demand growth as the world economy bounces back from COVID-19 in 2021-22,” Paul Jannke, the FEA’s principal of lumber, said during a conference hosted by the industry research group. That’ll keep the average lumber price this year above levels seen in 2020, he said.

Higher lumber prices could stifle the number of planned construction projects across North America and push prices for new homes even higher due to rising costs, echoing issues that hurt homebuyers in the past year. Skyrocketing lumber prices have lifted the average price of a new single-family home in the U.S. by US$24,386 in the past 10 months, the National Association of Home Builders said on Feb. 22.