In 2020 Everything, Including Lumber Prices, Is Uncertain

Gallagher Remodeling constructed this kitchen and family room addition during the summer of 2020, while lumber prices were at their peak.

To say that lumber prices have been volatile this year is an understatement. Framing lumber prices soared through much of the year – up nearly 120% at their peak in September when prices reached more than $950 per thousand board feet. Members of the National Association of the Remodeling Industry, including Gallagher Remodeling, are doing everything they can to stay one step ahead of the increased prices and material delays.

The Random Lengths Framing Composite Price began decreasing in mid-September, but is rising again in December.

The National Association of Home Builders (NAHB) has stated that the increase in lumber prices added more than $16,000 to the average price of a new home and have taken steps to solve the issue. On December 1st, the U.S. Commerce Department reduced tariffs on shipments of Canadian lumber.

“The Commerce Department’s action to reduce duties from more than 20% to 9% on softwood lumber shipments from Canada into the U.S. is a positive development, but more needs to be done,” said NAHB Chairman Chuck Fowke. “Tariffs have contributed to unprecedented price volatility in the lumber market in 2020, leading to upward pressure on prices and harming housing affordability for American consumers.”

NARI member Roger Gallagher of Gallagher Remodeling noted “Lumber materials are a very small part of a remodeling project compared to new construction, so the overall impact on our projects has been minimal.”

Some remodeling businesses have material price volatility clauses in their contracts, but others do not. Gallagher said “Because we don’t have a price clause in our contract, our clients have not seen an impact on their project budgets. However, consumers should expect to see estimates and final project costs increase going forward.”

A master suite addition is framed for homeowners in Winchester.

In addition to price increases, the delays in sourcing materials is also proving to be an obstacle. Delays in sheet metal, HVAC materials, concrete, copper, roofing and appliances are common this year. As a result, sometimes remodelers and subcontractors buy materials months in advance to make sure everything they need is available, and projects continue on schedule.

Basic supply and demand accounts for a lot of the current issues. The entire building season was condensed after most remodelers, including Gallagher Remodeling, shut down projects in March as the pandemic began and safety was paramount. This caused pent up demand for materials. Lumber mills, which also shut down, simply haven’t been able to catch up for time lost due to Covid.

While remodelers have certainly been aware of the rising prices, many homeowners are not. Today, many are realizing that remodeling prices are increasing and that it is not as easy as it once was to purchase appliances, for example.  Planning building projects well in advance is now more important than ever.