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Rising lumber prices affecting new home construction, renovation projects

Posted at 6:21 PM, May 05, 2021
and last updated 2021-05-06 00:35:55-04

The price of lumber has skyrocketed.

When the pandemic started, mills shut down production in anticipation of a housing slump.

That never happened and now there's not enough lumber. Home construction and renovation projects are delayed.

The average price of a new single-family home is also more than $35,000 higher than it would normally be.

Industry executives expect lumber production to eventually catch up with demand.

We checked in with Arroyo Grande lumber yard, Burke & Pace, to see how prices are faring in our own backyard.

They told us the cost of a 2x4 is up 150% compared to just one year ago.

The major increase is due in part to demand. Their lumber yard has seen a 60% increase in people picking up material since the pandemic started.

“It’s the craziest I've seen it here and I've been here about 15 years,” said Michael Leon, owner of Burke & Pace. “Every homeowner is at home looking at their fence that they wanted to repair, their decks, their remodel, their additions.”

Leon says customers have been wiping them out of plywood, OSB, 2x4s, and fencing.

“It's just driven that demand through the roof and the mills couldn't keep up with it originally and now it's like every two weeks you're seeing a huge jump in pricing,” Leon said.

A 2x6 last year cost .70 cents a foot. Today, it’s $1.43.

A 4x8 sheet of plywood went up from $20.25 to $60.50.

A sheet of OSB went from $13.50 to $58.

To put it into perspective, 100 feet of fence that would have cost $800 a year ago is now closer to $1,400.

“Lumber prices is a challenge on the scale that we haven't seen in at least modern history in the construction industry,” said Chad Robertson, owner of Robertson Builders.

Robertson says material used to be 1/2 to 2/3 of the cost of labor.

“Now we're seeing the material price more than the labor price and that's something we've never seen before,” Robertson said.

Leon adds that the increase in prices also has to do with the tariffs on imported goods. Ninety percent of OSB is from Canada. But most of the lumber from Leon’s yard is sourced from mills in Humboldt County, Oregon, and Washington.

“The demand is there and these mills can just charge whatever they want to now because we're buying it,” Leon said.

Lumber is not the only material that’s recently gone up. Just about every aspect of building has increased including steel, doors, windows, and tile.