Chicago lumber futures rose to $1,127 per thousand board feet at the end of March 2021 – a 400% increase from a year ago.
I’m currently doing an extensive remodel of the home I live in – and I’m doing 90% of the work myself for two reasons: (1) as the son of a high end San Diego home builder, I’ve developed design and building skills; and (2) I love creating beautiful things.
I’m totally pimping it out to make it fit for a King (me) and a Queen (my wife).
A year ago, I paid $2.00 for an 8 foot construction grade 2 x 4. Today that same stick of wood costs $7.00.
Even during the 2000-2006 home building boom, lumber prices only rose to a high of $450.
The National Association of Home Builders (NAHB) said that soaring lumber prices had added $24,400 to the cost of a new home – which may help to explain this: After New Home Sales hit a 14 year high in August 2020, the number of new homes sold has fallen by 26.7% through February 2021.
The Best Cure for High Prices?
The old line is that the best cure for high prices is high prices.
If the price of something gets too high, then people buy less, which then leads to increased supply, which lowers prices.