The price of lumber has skyrocketed during the pandemic because of a shortage.
According to the National Association of Home Builders, lumber costs have spiked 180% since this time last year, increasing the cost of building an average single-family home by $24,000.
Boone County Lumber Company in Columbia said it's paying three to five times the normal market prices for lumber. Oriented strain board, a popular wood used for new home construction, typically ranges from $8 to $10 a board but now costs more than $40 and by this summer is expected to surpass $50.
Boone County Lumber Company Brad Eiffert said there are multiple factors contributing to the price spike.
"A lot of manufactures reduced their capacities because housing starts went from 2 million down to 1.1 million for over 10 years. So as an industry we adjusted to a lot lesser demand and now we are returning to normalcy. And the industry both labor and manufacturing just does not have the capacity. And then we've had massive hurricane disruptions in the south, and the floods that came with that, and the forest fires in the west that literally shut down the entire state of forestry for a month last fall," Eiffert said.
Low-interest rates and mill closures are also contributing to the lumber shortage.
"As long as we're in a low-interest environment and we are so underbuilt," Eiffert said. "So I think we're going to be trading in a new higher range for a significant period of time and I don't see returning to historical norms anytime soon in any forest products commodities."
Eiffert said new house production in the U.S. has increased nearly 40 percent in the last year over the ten-year average.
"We have a lot of catching up to do as an industry," he said. "It's going to take a while for us to work through this shortage. And so, I think that's going to continue to provide pressure for manufactures on the demand and I think it's going to provide higher values to remain for some period of time."
Eiffert said usually the construction industry is one of the first industries to plummet and the last to recover during an economic downturn. However, he said the construction industry wasn't hit as hard as other parts of the economy during the pandemic.