Across the country, wholesale lumber costs are at historical highs, with plywood prices climbing more than 27 percent over the last two months. The skyrocketing prices are making some contractors worry about the rising cost of wood-frame construction.
Compared to a year ago, the cost of plywood is up more than 61 percent, according to randomlengths.com, which tracks prices in the lumber industry. The wholesale cost of plywood rose from $268 per 1,000 square feet a year ago to around $510. Oriented strand board is up 152 percent, from $170 per 1,000 square feet a year ago to approximately $428 in early September.
What has made the price of wood go through the roof? The continuing boom in home construction, a building season that was shortened by last winter’s harsh weather and the military’s need for wood for U.S. troops in Iraq all played a part in the current price hike. Inventory simply ran too low because dealers thought demand would fall. The demand instead increased and the short supply resulted in increased prices.
Some contractors are hoping to weather out the price hikes since prices for current projects were locked at lower rates for 60 days at a time. However, the price of a new home sales is likely to increase from $3,000 to $5,000 in the near future to absorb the rising cost of construction. For non-residential construction, contractors may decide to turn to non-wood building materials to avoid the wood shortage.