Lumber Costs Have Improved but Demand Is Still High

Lumber

The increased demand for new homes and for renovations on existing homes would normally be good news for builders and contractors. Lower interest rates would normally be a positive for the economy and for potential homeowners. As we know, normal is different now.

Lower interest rates and working remotely have spurred demand for construction activity. Many potential homebuyers are able to purchase further from employment centers in less expensive areas. Many have decided they want more space or improvements in their existing homes. This coincides with building material and labor shortages, and supply chain issues. The imbalance between this demand versus availability of construction materials has resulted in delayed building projects and higher costs.

Although lumber cost and availability has improved since the beginning of 2021, we are still seeing high demand and reduced supply of construction materials and labor, which have impacted prices. We continue to review the data and most of what we wrote in Our Perspective on “Runaway Lumber Prices” earlier in 2021 still applies.

We have not adjusted our inflation forecasts from our previous statements, since most experts still agree the increases should moderate late this year into 2022. 

e2Value keeps up with changes in costs to provide fast, cost-effective and accurate replacement cost valuations. e2Value’s estimators allow you to quickly and easily value homes of any size or age. You are able to value the smaller older homes and newer larger high value homes and everything in between.  Contact us for more information about our estimator tools.