Recent trends in lumber prices have been anything but steady. Since the beginning of 2018, we have seen three major price spikes for hardwood flooring materials. These include cost-up swings in raw material costs (such as wood or cedar) that left some manufacturers with too much debt to withstand.

Some examples of these are IKEA’s Ingvar Material which was made popular due to its affordability, however after the recent spike it is now 2x more expensive than it was a year ago! The same goes for West Elm’s Maple collection that has their famous white solid surface material at twice the original price!

Other instances where supply meets demand are creating a situation where there is an excess of product. This is very prevalent in the furniture market right now. Many retailers can’t keep up with low inventory levels and high consumer demand.

This article will discuss how lumber pricing works, what factors influence them, and some potential reasons why these price sprees occurred. Hopefully you will be able to identify if and when future price hikes may occur for your favorite new pieces!

What Is Lumber Pricing?

In order to understand why lumber prices seem volatile, first let us define exactly what lumber means. Lumber is defined as any kind of wooden board or sheet that gets used to make another object. Common uses for this include framing for windows and doors, table legs, drawer fronts, etc.

Demand for lumber is increasing

There are several reasons why demand for lumber has increased rapidly in recent years. More homes being built means there’s an ever-increasing need for wood to build them with.

More homeowners are investing in home improvement projects as well, which requires additional supplies like plywood and drywall.

All sorts of furniture and other products contain large amounts of wood, so people buying furniture and electronics also helps fuel the demand.

Lumber companies can’t keep up with all the orders, especially since many stores and individuals purchase vast quantities at one time.

Some experts believe that we’ll see even higher demands for lumber in the coming years. People are predicting more house building due to the rising costs of housing.

Lumber is in high demand

This past spring, there was an unexpected run on hardwood floor stock due to growing popularity of grays. People were buying new floors and refinishing old ones!

Many people begin their home improvement projects by looking for ways to update their house or remodel it. With increasing costs of homeownership, many look to do things themselves to save money, which can mean painting, tiling, or woodworking.

Mostly made out of pine lumber, most consider white oak to be the ideal soft-grain floor material. While they may cost more than manufactured products with similar looks, they are much more durable and versatile.

Because these woods are so popular, manufacturers have limited supplies and rising prices. As such, there is a rise in price per square foot for quality boards.

Hardwood flooring seems like it will never drop in price, but some varieties are nearing a decline. Luckily, you can still find good deals online and at your local building supply stores.

The U.S. is in the midst of a housing boom

There has never been a better time to be a home buyer, especially if you’re looking to invest in a new house or want to remodel your current residence.

The reason for this burgeoning real estate market is due to two main factors — low mortgage rates and plentiful supplies of quality homes and lots.

Mortgage interest rates are at their lowest in nearly a decade. According to Bankrate, the average rate for a 30-year fixed-rate mortgage was 3.6% in March 2018, down from 4.2% one year earlier.1 Even lower rates like 2.5%-3% can make a difference when it comes to monthly payments, making homeowners more affordable.

Furthermore, there’s an abundance of land and buildings available for purchase. Home inventory hit its highest level since 2005 last month, with 1.8 million existing houses and condos listed for sale nationwide.2 That’s about 500,000 more than in December 2017!

With so many great bargains out there, chances are you will find something that meets your budget. And don’t forget those savings in building materials! Many people pay far too much for lumber because they overestimate how much it costs. In fact, according to the National Association of Home Builders (NAHB),3 average cost estimates were $4,400 per finished square foot, which is only 5% higher than what builders actually spent on average ($4,100 per SF).

There is a lot of building work taking place

The most recent update to how lumber prices are trending comes from the National Association of Home Builders (NAHB) Housing Market Survey, which was published in November. This survey looks at several price indicators for home materials such as lumber, drywall, windows, and others.

The NAHB found that average cost per square foot for hardwood flooring increased by 5 percent year over year, with solid wood floors averaging $539 per sq. ft. Costlier oak or maple woods accounted for half of the increase.

This is slightly higher than last month’s finding where they reported an average cost of $525 per sq.ft., but it should be noted that their March survey was conducted before many states officially announced their reopening plans. Since then, people have been able to go back into business and start working again, so it is possible those areas impacted the pricing of certain products.

Overall though, this points to a steady flow of new construction projects and thus demand for lumber. People are also spending more money when buying homes, which helps fuel greater consumption of lumber and other building supplies.

There are many homes being built

While lumber is not as cheap as it was in the past, it is still much less expensive than it was years ago. This is due to several reasons!

Lumber companies have technology that allows them to monitor how quickly their products are selling. With this knowledge, they can order an adequate amount and cut down what size of stock item they need at any given time.

This way, they do not overproduce product and lose money when it is wasted or sold for a lower price.

There is a growing population

As more people have access to good quality lumber, it has become increasingly difficult to find low priced stock at any location. This is especially true if you are looking for solid wood furniture or even just an easy way to make some new projects.

Most large stores that sell building materials have eliminated their floor models due to rising costs. These hardwood floors that they were selling for under $100 are now well over $200 per square foot!

That being said, there are still many locations across America where you can get cheap lumber. You will need to be aware of your budget though as most sellers charge very high transportation fees that add to the overall cost.

Some great sources include online sites such as Amazon and eBay. Both these websites offer huge discounts because they both use the same supplier network. By buying directly from the source, you save not only on shipping but also on overhead costs like rent and staff salaries.

There are more lumber companies opening up

Most large-scale lumber producers have closed down or limited operations due to the current health of the industry. This is why you’ve seen an increase in independent contractors buying wood online, or sourcing it through suppliers that buy direct from timber companies.

There are also some new strategies being used by larger corporations to cut back on production. For example, many manufacturers are choosing between solid surface materials or plastic over PVC lumber.

And while most people associate lumber with building homes, there has been a rise in uses for this material outside of housing as well.

There are fewer lumber companies closing down

Recent reports of several large-scale lumber closures have sparked fear in consumers about what will happen next. Many believe that we’ll soon see a run on lumber, as people organize to buy as much as they can before stores go out of business.

Fortunately, this isn’t quite the case yet. While some lumber companies are shutting down or scaling back production, there aren’t any signs of an overwhelming demand for wood. In fact, many experts predict that lumber supplies will remain relatively stable at least through 2020.

Why? Because most homes built today don’t require very much lumber! Most families build with only two types of materials — dry wall and floor coverings made from plastic or ceramic tiles.

These substitutes are far more affordable than traditional wooden floors or doors, for example. Plus, you can often find them at your local big box store like Walmart or Home Depot.

So even though it may be expensive to make yourself feel more secure by stockpiling lumber, don’t. It probably won’t help very much anyway.