According to www.tradingeconomics.com, lumber futures peaked at over $1,600 per 1000 board feet in 2021, but started trending down in October ($700 per 1000 board). In December 2021, shortly after the Commerce Department met in November and moved to double the tariffs on Canadian lumber, lumber peaked again.
Currently, lumber is trading around $1,200 per 1000 board feet. To put things in perspective, in June 2020, lumber was trading around $570 per 1000 board feet. In 2 years lumber has just about tripled in cost.
Probuilder Magazine reports the average cost of new single-family homes increased by almost $36,000 in 2021. Today, in our current market we are seeing increases greater than $36,000, largely due to additional material and labor increases. The demand for housing in Nashville is very strong but the supply is limited. As a result, we are seeing homes that sold at the end of 2020 @ $141 a sqft now selling @ $195-$200 a sqft or more.
It’s hard to predict if relief is in sight. According to Probuilder Magazine, The National Home Builders Association is working with the current administration on a solution to lessen the burdensome tariffs on lumber. Meanwhile, the Fed has slowed purchases of mortgage-backed securities and the result of this action is higher interest rates.