Soaring lumber prices hit “insane” levels

September 29, 2020

Residential contractors are dealing with “insane” prices for lumber, especially plywood, as a rise in North American home building, wildfires and a shortage of lumber have driven prices to record highs.
“I am eating up to $1,000 on contracts I signed in January,” said an estimator at Up and Up Roofing Ltd., Vancouver, who said a 4- foot by 8-foot sheet of 3/8-inch plywood is now selling for $32, up from $11 eight months ago. “It’s insane.”
On September 24 Home Depot Canada was selling ½-inch standard 4 by 8 plywood for $35.44.
And there is no reprieve in the optional oriented strand board (OSB) market either.
As of September 18, a big surge in wood panel prices surprised builders, with benchmark panel commodity OSB 7/16” in Ontario jumping 5 per cent to $960 per thousand square feet (msf), compared to the previous week when it was $915 msf, according to Madison’s Lumber Reporter.
This price is up an astonishing $110, or 12 per cent from one month ago, when it was $850 msf. Compared to mid-September 2019, the price is up 284 per cent.
Home Depot was quoting $35.44 for a 4x8 sheet of 7/16-inch OSB panels as of September 24.
While flattening out after phenomenal rises in the past few months, the benchmark price of North American construction framing lumber (2x4s) is now $960 per thousand board feet, up 151 per cent from a year ago.
A big reason is a surge in U.S. housing starts, which reached the highest level in 14 years in August to a seasonally-adjusted level of more than one million units for the month.
The lumber price run-up over the past several weeks has demolished the previous North American record high for SPF (spruce, pine, fir) 2x4s of US$650 msf set in mid-2018. Prices for other wood building products are also rising quickly.
Canadian home builders estimate that lumber price increases in 2020 to date could translate into $8,000 to $10,000 more to build a typical single-family house.