High lumber prices continue to trouble builders and home buyers a year after Covid-19 first disrupted the market — with a price peak last month about 400% higher than the same time last year.
“I’m looking at roughly a 20% price increase in the cost to build a home today compared to prior to Covid,” said Denis Borbeau, head of the Vermont Builders and Remodelers Association and a builder in Swanton.
In May 2020, the price for lumber sat between $300 and $370 per 1,000 board feet, the unit used to measure the commodity on the market. This May, that figure peaked at $1,686 per 1,000 board feet.
Though the price has since declined, those in Vermont’s lumber and building industry say the impacts remain, particularly for people looking to build relatively small, first-time homes.
“It looks like the category that’s getting caught and the people that are pausing are the more affordable houses,” said Joe Miles, president of rk Miles, which runs eight building supply and hardware stores in Vermont and two in Massachusetts.
“If you’re trying to build a house with a value up to like $500,000 or maybe even up to $750,000, and you’re looking at the prices right now, I think there are some people who are saying, ‘I’m going to wait,’” he said.
For Borbeau, about three-fifths of his yearly projects are usually on the smaller scale.
But he’s not building any of those kinds of houses this year.
“I’m doing the high-end homes,” he said, “because those are the people who had money” to absorb the price increases.
At the end of April, the National Association of Home Builders said inflated lumber prices were adding almost $36,000 to the cost of a new home.
Last summer brought an uptick in demand for building services and materials nationwide, driven in part by increased interest in DIY projects. Lumber mills did not see the demand coming, supplies became scarce and prices shot up.
The price trends have not only affected what’s being built, but also the ability of retailers to get supplies out the door.
“We’re having a hard time taking care of our customers because of availability,” Josh Druke of WW Building Supply in Newfane. Demand is high, both for lumber and other materials.
Druke, who is president of the Vermont Retail Lumber Dealers Association, said building supplies sellers are having to work “twice or three times as hard” to find the products customers want, in the quantities they want them.
Miles said that for years, retailers could order treated lumber — often used for decks — and get their shipment a few days later. Now, he said, it might take four weeks to arrive.
When and how lumber prices may retreat is up in the air, industry players said.
“The best that we can hope for in 2022 is to be paying double the price of what we were for lumber — instead of four times the price,” Borbeau said.
Miles said he believes the prices might drop as the building season progresses, and the balance between supply and demand approaches a more normal level.
“It’s going to work itself out at some point,” he said.
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