Lumber prices at record highs thanks to hot housing market

Futures have risen 47 percent in the past three weeks

(iStock/Illustration by Kevin Rebong for The Real Deal)
(iStock/Illustration by Kevin Rebong for The Real Deal)

Lumber prices are rising to record prices, signaling that 2021 could be another strong year for homebuilding.

Lumber prices generally drop during the winter months. But this season they have risen to historic highs for species, products and grades, according to Random Lengths, a pricing service, the Wall Street Journal reported.

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Oriented strand boards — commonly used for walls — and southern yellow pine — often used for fences and decks — are at their highest prices ever, according to the Journal.

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Even engineered wood products used for new construction are on backorder until March because of high demand. The Random Lengths Framing Lumber Composite price increased to $966 per thousand board feet last week, up from $955 in September.

Lumber futures have risen 47 percent over the past three weeks, the Journal reported.

At the beginning of the pandemic, some mills slowed production over fears that job losses would sink demand. But government-ordered lockdowns motivated people to complete home improvement projects and buy new homes for more space. The surge was aided by historically low mortgage rates.

Housing starts and building permits for private-owned residential units increased in December to their highest level since 2006, according to the Journal.

[WSJ— Keith Larsen