ROANOKE, Va. (AP) — Lumber prices have begun to fall in the last few weeks. But the commodity still remains significantly more expensive than it did before the pandemic.
The Roanoke Times reported Saturday that lumber prices skyrocketed more than 300% since April 2020.
Lumber sold for about $350 per thousand board feet before the pandemic. The price peaked at about $1,500 per thousand board feet in May.
And yet, demand is still strong.
Robert Dietz, chief economist for The National Association of Home Builders, said that people have been able to save more money and put it toward a down payment on a house.
Building permits for single-family homes grew 13% in Virginia in 2020. Dietz said growth is expected to continue this year. But he said that climbing interest rates are likely to slow home sales at a certain point in the future.
The National Association of Home Builders estimates that rising lumber costs add an additional $36,000 to the average new single-family home.
People in the construction industry say a number of factors are at play. There’s been a surge in new construction and remodeling. At the same time, there’s been a decline in production at mills because of the pandemic. On top of that were tariffs on Canadian lumber.