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June 16, 2022

Market Update: Lumber Pricing [June 2022]

Market Update: Lumber Pricing [June 2022]

Lumber pricing has been shifting a lot lately. After a year of high prices and increasing costs, the lumber market is finally cooling off. This is good news for you if you’ve been waiting to build a custom home. Lumber is the backbone of any home build, so lower lumber costs means a more affordable custom home project for you. Keep reading to learn more about the market update in lumber pricing for 2022. 

Recent History of Lumber Pricing

2021 saw some crazy shifts in lumber pricing. Costs were high at the beginning of the year because of increased demand caused by low mortgage rates. The COVID-19 pandemic also limited the amount of lumber production possible. High demand mixed with low supply resulted in raised prices. After January 2021, prices took a dip, but not for long. The California Wildfires and high rainfall limited supply again. This time, as demand and prices crept up again, builders and home buyers rushed to order lumber before it reached astronomical cost levels. By early 2022, prices were at an all-time high. 

Now, market experts are suggesting that lumber prices are finally falling. The home buying buzz has finally cooled down, and those who have renovated their office spaces no longer need to. Accessing lumber has also gotten easier due to good weather and fewer transportation blockages. Lumber production has almost returned to pre-pandemic levels, too. 

Factors that Affect Lumber Pricing

Several factors influence the price of lumber across the nation. These are some of the biggest reasons that lumber prices change: 

  • Weather and Natural Disasters: Lumber comes from trees in the forest, which are impacted daily by weather and natural disasters like wildfires, hurricanes, and monsoons. Extreme rain, droughts, or other natural disasters affect lumber supply by destroying it or making it difficult to access.
  • Supply and Demand: These two fundamental economic principles are the main reasons lumber prices shift. When there is high demand and low supply, prices go up. This is what happened in 2021 and early 2022. Demand for lumber increased dramatically when people saw the price slowly creeping up. Builders and homeowners bought up lumber to beat the sky-high prices. All this buying caused the cost of lumber to rise. Today, demand has calmed down, and prices are doing the same. 
  • International Politics: Although it would be great if all lumber were American-grown, that isn’t the case. Just as a war thousands of miles away can cause the price of goods like gas to go up, trade disputes and international politics play a role in the cost of lumber. Import and export tariffs, along with international conflicts, can cause the price of lumber to go up or down. 

Build Your Custom Home in Prescott with RES Contracting

If you’ve been waiting for lumber prices to fall so you can build the custom home of your dreams, now is the time to move. With decreasing lumber prices and a relaxed housing market, the cost to build a custom home is the most affordable it’s been in recent years. If you’re looking to build in Prescott, Arizona, contact our team of professional custom home builders at RES Contracting by giving us a call at 928-776-0301 to talk about your next project.