Reason 1:

You may have noticed a drastic rise in lumber prices in the past few months; albeit the price has had a steady surge since April 2020.

Union County people looking to do home repairs in summer months, or possibly build a new house, will see lumber prices like nothing before. During the month of May, a lumber shortage was endured across the country resulting in all-time record high prices.

These costs are due in large part from U.S. sawmills shutting down in 2020 due to COVID-19. The repercussions are just now reaching the industry. These sawmills were preparing for a housing slump that never came. National unemployment bottomed out in April of 2020, but it didn't last long like they projected. It steadily rebounded back to normal, like we are now. Therefore, those few months of non-production from the country's sawmills, in preparation for COVID-19, is one of the reasons partly responsible for record prices.

On the opposite side of the scale, home interest rates dropped in the early days of the pandemic, hitting all-time record lows. Low mortgage rates brought more buyers into the market than had been anticipated. Fast-forward a little bit, now today's home builders can't sustain these prices. It’s cost efficient for a potential property owner to buy an existing house, rather than build. According to the National Association of Realtors, the median sale price of homes had surged a record 17.2%, in March 2021. This is the highest percentage increase that has ever been recorded since the association started tracking prices in 1999.

According to the National Association of Home Builders (NAHB), high lumber prices have pushed the cost for a family single-sized home to $35,872 more than it was in 2020. However, home builders are not the only people affected. NAHB reports state that households on average will also pay an extra $119 per month for rent.

Reason 2:

The other reason for the high cost of lumber is the longstanding tariff placed on Canada. The tariff was first imposed by the Trump Administration at 20 cents in 2018 but then was later eased to a more favorable nine cents. According to the College of Environmental Science and Forestry; The U.S. imports approximately $4.5 billion worth of softwood lumber from Canada, accounting for 83% of total softwood lumber imports by value. That's over 10 times as much as the U.S. exports to other countries.

Nevertheless, the Biden Administration announced on May 21 they planned to double the Canadian lumber tariff to 18 cents. Before the proposed hike can go into effect, it'll need to go through several month-long reviews in a drawn-out process. So far, Canada's sawmills have almost all ceased production to the United States and started focusing exporting efforts to European and Asian nations.

On May 25, the cash price per thousand board feet of lumber climbed to a record $1,515, according to an industry publication named Random Lengths. According to Fortune.com, U.S. lumber prices have increased a staggering 323% since April 2020.

"If the administration’s decision to double tariffs is allowed to go into effect, it will further exacerbate the nation’s housing affordability crisis, put even more upward pressure on the price of lumber and force millions of U.S. home buyers and lumber consumers to foot the bill for this ill-conceived protectionist action," wrote the chairman of the NAHB, Chuck Fowke, in a public statement released on May 22.

To end on a positive note: Industry experts project lumber production will catch up with 75% of the demand before the end of the year. They project a steady fall in prices over the next 18 months as lumber mills across the nation increase their output. Refer to the graph for this week's current prices for common lumber sizes at local hardware stores. Board prices will typically vary weekly, call stores or check online for updates.