The COVID-19 pandemic brought with it a shortage in a number of consumer products—you likely remember the toilet paper and hand sanitizer shortages from the early days of the pandemic. Another commodity that has been in short supply over the past year is lumber. 2020 began with somewhat of a lumber shortage, but with the onset of the pandemic it only got worse, and that trend has continued into 2021. As you can imagine, this shortage has affected everything from DIY home projects to new home construction, including deck construction.

Why is There a Lumber Shortage?

Sourcing issues due to import tariffs and COVID-19 shutdowns combined with an increasing demand for lumber has created a “perfect storm,” so to speak, resulting in a lumber shortage here in the U.S.

In Jan 2018 the U.S. raised import duties on Canadian lumber, sparking a supply shortage in the U.S. 

Then the onset of COVID-19 last year brought reduced production or even complete shutdowns of mills and building materials producers across the country. Ramping production back up again to meet demand was much more difficult than the slowdown at the beginning of the pandemic, with some workers contracting COVID and others forced to quarantine due to exposure. 

And aside from the issues caused by the pandemic, the costs of everything that goes into lumber production are on the rise—from labor to transportation to containers and more—which in turn drives up the cost of lumber, regardless of supply or demand.

At the same time, the demand for lumber rose in 2020. Home improvement projects were up significantly, with more homeowners building decks or additions, repairing fences, upgrading home offices, and so on. Throughout the pandemic, homeowners have been spending more time at home, many of them taking money they would have otherwise spent on travel and restaurant meals and spending it on home improvement instead. New housing construction was up as well, with new home construction in the U.S. up 17% last summer. In addition, restaurants across the country scrambled to build outdoor seating and dining areas in an attempt to adjust to COVID-19 restrictions.

Then, once lumber shortages started to appear, people began to hoard what was left. The first materials to disappear were pressure-treated lumber. Contractors unable to find pressure-treated wood began to stock up on composite decking instead, increasing demand and reducing availability of the already popular decking material. Once lumber began to be scarce, the effect trickled down to other building materials, such as windows, doors, and engineered panels.

As you might expect, the shortage of lumber combined with increased demand caused prices to skyrocket. 


Lumber Prices Are Up

Lumber prices were on the rise long before the pandemic. The National Association of Home Builders reported that prices were up 30% between August 2017 and Jan 2018 due to tariffs on Canadian lumber, and they continued to climb from there. 

The onset of COVID-19 caused prices to soar even higher: lumber prices rose to all-time highs, up 130% last fall. They took a small dip after that point, only to begin climbing again. As of the beginning of March, the price of lumber was up 188% since the onset of the pandemic! 

To give you an idea of how much the price of lumber rose in 2020, take a look at these numbers:

  • OSB plywood prices rose 78% last year, with overall plywood prices up 61% 
  • Spruce went up 50% 
  • Pressure-treated lumber was up 250% at one point last year!

What’s more, in some cases lumber shortages have caused builders to send trucks out of state in search of building materials they can’t find locally, further increasing building costs.

Housing Costs Are Up

The increased cost of lumber raised the cost of new construction housing by an average of more than $24,000 per home. But it seems that, at least so far, homebuyers have been willing to pay the higher prices, as the housing market has remained strong. During the height of the 2020 building season, between May and July, new home construction was up 17%. This was still below 2019 numbers, but very strong considering the pandemic. And the beginning of 2021 had new home construction numbers at their highest rate in a decade!

The continued strength of the housing market is likely in large part because mortgage rates have remained at all-time lows, so buyers are able to spend more than they otherwise could. 


The Future of Lumber Pricing and Availability

In general, the price of lumber is expected to go down as the pandemic eases. But how quickly prices drop is still up in the air. For prices to go down, several things need to happen:

  • Lumber production in the U.S. needs to increase to cover the lost supply from Canada (due to tariffs) 
  • Shutdowns in the lumber industry need to come to an end (the vaccine rollout and a slowdown of new COVID-19 cases will help make this happen), and 
  • Timber producers will need to ramp up production to help bring prices down.

At the end of 2020, the Commerce Department decided to reduce tariffs on Canadian lumber, in the hopes of providing some relief and bringing prices down. The timing of the rest depends largely on when the pandemic ends and life returns to normal. The rollout of the COVID-19 vaccines is a major step toward that goal, but it could still be months before any major changes to lumber prices are seen. 

Until then, we can expect that lumber prices will remain high and shortages will continue.


What Does This Mean for My Deck Project?

This doesn’t necessarily mean that a new deck is out of the question for you. Here at Outdoor Solutions we offer a variety of decking options, including composite decking, and plastic lumbar. We can help you find the right decking for your project and budget, even in the midst of a lumber shortage and increasing costs.

Spring is one of the best times of the year to build your deck, and our calendar is filling up. Now is the time to get on our schedule! If you are considering a new deck in 2021, contact us today to discuss your options.