Originally published March 4, 2021
Updated May 3, 2021
According to the Wall Street Journal, lumber prices have shot to fresh records, defying the normal winter slowdown in wood-product sales in a sign that the pandemic building boom is bowling into 2021.
The last week of February (2021), the Random Lengths Framing Lumber Composite price rose to $966 per thousand board feet, exceeding the $955 high set in September (2020).
Lumber futures have climbed 49% over the past three weeks, to more than twice the price a year earlier. Lumber for March (2021) settled Tuesday at $992.40 per thousand board feet, eclipsing a mark set in September (2020) as the highest closing price ever.
Chart: Zach Phillips | Construction Dive Source: BLS Producer Price Index Get the data Created with Datawrapper
According to Construction Dive, contractors have dealt with unprecedented volatility during the past 12 months.
One of the most notable impacts of the pandemic for construction has been the steep rise in prices of materials that have resulted from the domino effect of snafus in the global supply chain reverberating down to contractors. Steel mill products have had the least amount of volatility since April 2020.
Cost of Single Family Home Increases $35,872
The National Association of Realtors reported that the median sale price of an existing home was almost $304,000 in February 2021, up 14.1% from a year ago. The Marketplace states that one of the main factors in the price increase is the soaring cost of lumber. There are a lot of forces driving up the price of wood. COVID-related mill shutdowns and devastating wildfires have reduced the available supply, while demand for home-building and remodeling has only grown.
The surge in lumber prices in the past year has added $35,872 to the price of an average new single-family home and $12,966 to the market value of an average new multifamily home, according to the the National Association of Home Builders.
Baystreet reports that North American lumber prices will continue to rise this year as homebuilding and renovations cause demand for wood to outstrip production supply.
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.
This 19,600-square-foot home near Toronto features high-performance building techniques, including steel framing.
Contractors Seek Steel Alternatives
A recent poll conducted by Construction Magazine Network revealed that 75% of contractors are interested in or are already pursuing alternative materials – including steel framing.
Home Innovations Research Lab concluded that the spike in lumber prices is causing many builders to rethink alternatives to lumber — including the use of steel framing. Cold-formed steel framing for interior partition wall framing is perhaps the easiest-to-implement option, says Home Innovations. They anticipate seeing aspects of advanced framing grow in popularity, including steel framing, due to the rising price of lumber.
Cost of Steel v. Wood
A recent study sponsored by the Steel Framing Industry Association (SFIA), “Costs to Build with Cold-Formed Steel Versus a Wood-Framed Building,” addresses framing costs on behalf of architects, building owners, and general contractors.
While the research was completed before the current spike in wood prices, “Costs to Build” establishes that CFS framing and wood framing costs in mid-rise structures are essentially the same, when construction insurance premiums associated with using the selected material are included.
Of course, the current skyrocketing prices of lumber make CFS framing the clear favorite from a pricing point of view right now.
Therefore, SFIA gathered pricing information and has issued a bulletin associated with the “Costs to Build” report.
Article cited from BuildSteel.org