North American lumber prices will continue to rise this year as homebuilding and renovations cause demand for wood to outstrip production supply, according to a leading industry group.
Forest Economic Advisors LLC forecasts that higher lumber prices could stifle the number of planned construction projects across North America and push prices for new homes even higher due to rising costs.
Rising lumber prices have lifted the average price of a new single-family home in the U.S. by $24,386 U.S. in the past 10 months, according to the National Association of Home Builders.
The sharp rise in lumber demand initially took the industry by surprise in mid-2020 as the pandemic fueled a flurry of home renovations while homebuilding soared. Lumber futures rose to record highs above $1,000 U.S. per 1,000 board feet in February of this year, driven by low supplies of wood products. The contract, which averaged around $456 U.S. last year, was at $972 U.S. earlier this week.
U.S. lumber imports will need to increase by roughly 14% to 15% this year, according to Forest Economic Advisors. China has also increased its appetite for lumber, and the Asian nation will need to boost imports by around 14%.
Efforts to import more wood product from Europe have been hampered by a beetle infestation that has killed trees and led to increased logging.
