How Are Home Builders Dealing With the Rise in Canadian Lumber Prices?
Home builders are dealing with the rise in Canadian lumber prices as best they can. Home builders are using a combination of solutions while we all wait for the lumber and plywood prices to fall back to pre-pandemic levels.
Some home builders are using other materials. While new homes are traditionally framed in wood, some builders have been using steel to replace wood where possible. However, the price of steel has also been rising, so this is not a long-term solution.
Where possible, some builders have made deals with suppliers to buy in bulk at fixed prices. Those lucky enough to have anticipated rising lumber prices bought lumber and plywood in anticipation of a price problem.
Rising Prices for the Consumer
The reality is that almost all builders have to pass on the rising cost of lumber to the homeowner. This has meant higher costs for building a new home, although this is expected to be temporary. Most home building contracts will have clauses to protect the builder should certain materials become significantly more expensive than expected.
Why Are Lumber and Plywood Prices So High?
The reason for high lumber and plywood prices has nothing to do with supply. It has to do with demand and interruptions in the supply chain.
As more and more people were staying home because of the pandemic with record-low mortgage prices, many more people decided to build or buy a home or renovate the home they were in. This caused an increase in demand for lumber. Then the pandemic caused the slowing of transport, and many jobs at lumber mills and in transport were left unfilled.
Unfilled jobs created slowdowns at the lumber mills further exacerbating the problem. Once people are back at work, and shipping is at previous levels, then the prices for lumber and plywood are expected to fall over the next year.
Abstract Homes and Renovations Inc., is an award-winning custom home builder based in Vancouver, British Columbia. With 30 years of experience, Abstract Homes builds and renovates homes on the Lower Mainland with efficiency, integrity, and quality in mind.
If you have any questions about this article or would like to talk to us about building or renovating your home, please call us at (604) 220-5665.