High lumber prices and short supply has home builders frustrated
Because of the recent rise in wood prices, home-builders have been working with home-owners to purchase wood products early in the project, rather than risk big spikes.
FARGO — The prices of some of the most popular wood products like oriented strand board and 2x4's are going through the roof.
"We have the combination of high prices and we have short supply of many common building materials," said Nathan Pinke.
Pinke is with Pinke Lumber and Pinke Homes in Wishek and Northwood, ND.
"So OSB, half-inch thick specifically — which is a very common building material — a year ago we were selling it for $14.40 for a 4x8 sheet, today we are selling it for $45.40," Pinke explained. "We are making the same per sheet on it at $45 as we did when it was $14, so the margins are going down."
These higher prices impact everyone, even those planning summer projects like a deck or shed. Some of homeowners are choosing to wait, but for those building a home, there is another reason keep building despite the rise in material costs.
"On an average home, we are probably looking at $15,000 to $20,000 in additional cost, so that is enough to consider, but another thing to consider is that interest rates are at an all-time low," Pinke said.
Weekes Forest Product in Fargo sells wood products used in construction. According to them, as soon as product comes into their warehouse it is sent out to fill outstanding orders.
"Right now there is not enough wood in the system to meet demand, typically this time of year we would have 12 to 16 truckloads of product sitting in here (warehouse). Now, we have maybe (one) truck," said Justin Matthiesen, division manager with Weekes Forest Products in Fargo.
Homebuilders and distributors are expecting some changes in lumber prices in the coming year as mills catch up and the pandemic winds down.