Lumber is the most common type of material that is widely used in construction. It is also used to make furniture and floorings. The best quality of wood is that they are relatively high in terms of stability. Further, wood has the flexibility that can be used in the creation of various objects easily. The most important reason why we use wood is that they are the most important material in construction.
However, in recent years the price of wood has been rising. So, this poses the question- what is the reason behind the high price of lumber? Or why are lumber prices so high?
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Why are lumber prices high?
As mentioned earlier in the article, lumber or wood is one the common material used in construction. They are widely used for multiple features of the material. Lumber prices are in a way affected because of their demand. The last few years have seen highs and lows in lumber prices. Here in this part of the article, we will discuss why lumber price is high. Or in other words, what factors have affected the lumber price to go so high.
Factors or features responsible for the high lumber price
1. The rise in construction of single-family homes
In the year 2020, a huge change in the mortgage rate led to a rising in the number of people building homes. The fall in mortgage prices led single families to build their homes. As lumber is the main material used in construction the demand for the material grew. This factor resulted in the high lumber price. As the mills were unable to keep up with the demand in the market. Hence, they began trying to maintain equality between supply and demand by raising the price of the wood.
Apart from this, apartment dwellers saw the opportunity of low mortgage rates to invest in single homes. Further, the pandemic forced people to work from home. So, these factors contributed to investing in the single-home real estate market. As a result, the high demand for new homes created storage of wood and that led to a high price cost of the material.
2. Cost of logging and management by companies
One other reason why lumber price is high is the bad management of logging companies. If the wood has to be supplied to mills then trees need to be cut down. With deforestation being one of the major environmental treat cutting down trees must be done carefully. Some logging companies lack the expertise to manage the cutting off of trees effectively.
In case a company doesn’t make a note of replanting the trees that are cut it leads to a shortage of wood. Further, if companies decide to replant the trees and continue logging then that incurs a lot of costs. So, companies wouldn’t bear all the cost and push a part of it on customers. So, this is the reason why the wood price is high as it is tough to manage the demand for it efficiently.
3. A rare variety of wood
Wood is a natural resource that has its limit. In other words, wood is a limited resource and takes time to produce. One way to keep up with the supply of wood is indeed replanting trees. But we need to consider that trees take time to grow. The growth of the tree is not as fast as the rising in demand for the wood.
Further, wood being a highly demanded material and also widely used in construction its price is fixed to go high. Apart from this, some of the wood variety takes a lot of time to grow. In comparison to the common types of wood such as Fir, and cedar the rare variety is costlier. Some people prefer rare types of wood for making special prices.
Usually, musical instruments and art pieces are made of rare wood. Some of the best examples of rare wood are ebony, sandalwood and Brazilian rosewood. The cost of these type does timber are costlier than the regular ones.
4. Environmental issues
The fourth reason why are lumber prices so high – is the environmental issue. Further, storms, landslides, and heavy rains affect the supply chain. Any environmental issue in one part of the world indeed affects the price of materials all over the world. In the same way, in 2022 the heavy rains and storms in parts of Canada affected the lumber price. As trucks were unable to transport the wood in time and keep up with the demand the cost of it was raised.
Apart from environmental issues, one other factor that affects its price is tariffs. The cost of exports and imports and tax paid on the move of material has affected the price of lumber.
5. Processing of wood
The last factor that affected the price of wood is the procession of wood. Once the wood is chopped off a tree, they are passed through mills. In mills, several machines are used in turning them into useable materials. This process of turning wood logs into lumber sheets that help in construction is called the processing of wood. In addition to processing, some types of wood must be treated. This step of treating the wood helps them to be used outdoors. As they make the wood more sustainable that can withstand direct outdoor exposure.
Therefore, the steps of processing and treating wood can led to its rise in price.
In conclusion, the high price of lumber was the result of various factors. Some of the main factors that affected the price of lumber are listed here in this article.