Here at Buhrt Builders Inc., we look at world events and happenings to see how the cost of lumber and other factors may impact new home construction. There have been a number of interesting developments in the construction world and the price of lumber in world markets in recent years. Thus, we want to look at what the cost of lumber might look like in 2023.
Lumber Prices Have Fallen Considerably
The price of lumber was at very high levels in 2020 and 2021. The exact reason for the spike can be debated by very smart people, but the general consensus is that supply chain issues played at least some role in the price spike. There were issues getting the lumber where it needed to go, and this caused the price to climb. Demand also spiked as many people started buying homes during this same period of time. If you were a custom home builder during this time, you were keeping a very close eye on lumber prices as they started to impact your bottom line in many ways.
While prices did skyrocket, they also came down very quickly. Demand for housing has eased considerably since last year. Much of this has to do with rising interest rates and the expense of obtaining a mortgage in the first place. Given all of this, the price of lumber fell a lot in the summer of 2022, and it is expected to decline by at least another 12% in the third quarter of 2022.
Where Is the Price Headed in 2023?
No one can predict with perfect accuracy where the price of any commodity is headed in the next year. However, there are reasons to think that lumber prices will likely moderate to some extent. They have been on a rollercoaster ride for a long time, and now it seems like there is some time for the price to moderate the way that it should. If prices normalize, then many people will finally have the opportunity to purchase the lumber that they need for home construction or something else.
The price of lumber is likely to stabilize to some extent heading into 2023, and that is extremely important for those who are working on long-term projects that require the use of lumber. If you are in the midst of needing to get one of those projects done, then you need to look to see if you can pick up some cheaper lumber than what you would have had to pay for it just a year ago.
It is never recommended that anyone tries to time the market when it comes to commodities or anything else, but you certainly don’t want to be the person who is paying a premium price for a commodity just because everyone else has pushed demand up for that commodity as well.
Think through all of this and decide for yourself what decisions you need to make as we get closer to 2023.
Categorised in: Home Builder
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