Home renovation boom sends lumber prices to record

The relentless rise in lumber prices shows no signs of abating as the pandemic keeps people at home, spurring a home-renovation boom.

Lumber futures climbed to a record $1,004.90 per 1,000 board feet Thursday, rising for the eighth session in nine. Prices have climbed almost 40% this year, fueling concerns for homebuilders across the U.S., with the biggest industry group calling on the Biden administration to help boost supply.

Lumber’s surge in February is “adding thousands of dollars to the cost of a new home and causing some builders to abruptly halt projects at a time when inventories are already at all-time lows,” Chuck Fowke, chairman of the National Association of Home Builders, said in a report Wednesday.

Prices have been spurred by strong demand amid a boom in home remodeling and construction fueled by stay-home orders. The onslaught of demand has handicapped producers’ abilities to restock inventories quickly enough, further supporting prices. The rally has stoked concerns of inflation bleeding into the homebuying market.

Futures jumped as much as 1.8% to an all-time high of $1,004.90 per 1,000 board feet.

Earlier this month, Fowke’s group urged the U.S. government to help improve supplies. The administration needs to remove import tariffs on Canadian lumber and producers need to boost output, group said.