Through the roof
Lumber prices nationwide see significant increase
CONWAY, Ark. -- Prices of wood products used for home construction and home-remodeling projects have more than doubled in the last several months.
Prices have climbed from $7 to $19 per sheet of oriented strand board, an engineered wood sheathing for roof decking, walls and flooring.
With an average 300 sheets needed to build a standard-sized home, the increase in price tacks on an additional $3,600 to the final cost of construction.
OSB is rapidly replacing plywood as the preferred wood-panel material and has contributed to the recent price surges, said Michael Carliner, an economist at the National Association of Home Builders in Washington, D.C.
Though prices on lumber products like 2-by-4 studs have gone up as well, they are consistent with the seasonal market, he added.
The increase in prices is a result of simple economics, diminished supply and greater demand.
Homebuilders broke ground on 1.87 million new units last summer, the highest housing production rate in 17 years, according to the NAHB. Though U.S. housing starts fell in February for the second month in a row, they are still on track to exceed last year's levels, the highest since 1978.
Low interest rates have also encouraged homeowners to take out home-equity loans to finance remodeling projects. The NAHB estimates that 40 percent of softwood consumption in the U.S. goes into new homes and 30 percent into remodeling and repair.
Forest fires in the western United States have also put a dent in the supply of available wood, and higher fuel costs for transporting lumber around the country are also considered a contributing factor to the increase in prices.
"You're always told different reasons," said Tim Mills, buyer for National Home Centers Inc. in Conway.
Mills was told that U.S. military involvement in Iraq was a significant factor for rising lumber prices.
"The government bought a bunch of OSB and lumber to ship overseas," said Mills. "Of course, that drove plywood prices from the mills up and it hasn't come down from that."