The cost of lumber is going through the roof, and that is hitting the housing industry on all fronts. For homebuilders, renovation contractors and DIYers, the cost of projects is now far higher than it was just a year ago and about to cross into historic territory. Softwood lumber prices are now about 112% higher than they were a year ago and have jumped 10% in just the past week.
Increased demand for single-family housing, much of it driven by the coronavirus pandemic has housing starts up 30% year over year, according to the U.S. Census. That is part of the issue on the demand side. There has also been a surge in home remodeling, as people sit at home longer and put money they would have spent on going out or traveling into their houses and properties.
Low interest rates are also playing into lumber prices, heating demand for housing and giving builders more incentive to increase production.