Let’s explore one of the leading indicators in forecasting housing costs. The building materials industry is currently experiencing a shift in market dynamics, with a decline in the value of lumber while other materials such as drywall, windows, and concrete are seeing increases.
According to industry sources, some lumber mills have temporarily shut down operations during the winter months, which is expected to reduce the supply of lumber and drive costs upward. This is a seasonal trend in the industry, as the harsh winter weather can make it difficult to produce and transport timber.
This coupled with consumer demand going into the spring season, we expect to see lumber pricing increase over the next 60 to 90 days. However, weexpect the price increase for lumber will be short lived and we’re likely to see other housing materials reduce going into the late fall and early 2024.
3-year Lumber Pricing (per thousand board foot)
What does this graph tell us? Let’s start with determining how much lumber is needed to build a 2,000 square foot house. According to industry experts, it takes approximately 16,000 board feet of lumber to construct a 2,000 square foot home. In May of 2021, the cost of lumber reached an all-time high of $1,670 per thousand board feet. This means that the total cost for lumber needed to construct a 2,000 square foot home equated to $26,720.
As of January 26, 2023, per thousand board feet came in at $488. At this pricing, the lumber package for a 2,000 square foot home would total $7,808. Lumber prices have dropped significantly, providing a great opportunity for builders and consumers to purchase materials at a more affordable cost.
The graphs below demonstrate a notable upward trend in the prices of windows, drywall, and concrete over the past three years. However, it is noteworthy that towards the end of 2022, the prices for windows and drywall appear to have stabilized indicating a balance of supply and demand. It is important to keep in mind that these projections are subject to change, as market conditions are constantly evolving.
3-year Windows Pricing
3-year Drywall Pricing
3-year Concrete Pricing