The Impact of Climate Change on Lumber Prices

In the home building and remodeling industry, lumber prices have been top-of-mind since 2020. The impact of COVID on lumber mills and transportation in the early days of the pandemic certainly had an immediate impact on price and availability. And there has been a lot of attention on the supply chain issues across the entire home remodeling sector that have had a huge impact on our industry. (We have to order appliances HOW FAR in advance?) But the truth is that there is more to the specific issue of lumber prices than most people realize. In fact, climate change is having a significant impact on lumber prices and availability.

Over the last four months, the National Association of Home Builders reports that lumber prices have nearly tripled and that, as a result, the price of the average new single-family home has increased by more than $18k since August. Obviously we need less lumber for a remodel than is necessary to build a home from the ground up, but this provides insight into the direct impact of rising prices.

It’s important to realize that when it comes to harvesting lumber for homebuilding and remodeling, not just any old tree will do. Lumber has to have a certain amount of strength – after all, we don’t want that beautiful new addition to sag or fall down! Trees grow tighter rings in cold climates – so the further north you go (hello Canada!), the stronger the trees and the lumber they produce. Canadian trees are the source of most of the lumber we use and where the impact of climate change is being clearly felt.

So What’s Happening to Canadian Lumber?

The Atlantic recently published an interview with lumber trader Stinson Dean. In the article (which we highly encourage you to read), Dean provides an overview of how climate change has created multiple problems for the lumber industry over the past several years. To summarize Dean’s statements:

  • In 2009, the mountain pine beetle began decimating Canadian forests. Typically, cold weather would have kept the beetles at bay, but it was too warm for several winters and the beetles florished.
  • Vast numbers of trees had to be cut down quickly while the lumber was still viable.
  • In 2017-2018, there were massive forest fires that “burned more hectares in British Columbia than in the past 20 years combined.”
  • In November 2021, torrential rain flooded the area instead of the snow of a “normal” year. The resulting mudslides and floods in areas that had been denuded of trees took out transportation infrastructure – specifically the rail lines that the lumber mills rely on.

A recent article on Marketplace outlined similar issues as well as the impact of tariff rates on lumber imported from Canada. In November, the Commerce Department nearly doubled tariffs, raising them to 18%.

How Does This Impact My Remodel?

Our takeaways: Lumber is unlikely to come down to pre-COVID levels, so don’t delay waiting for that to happen. Take advantage of remodeling over new construction: we will always keep what we can, and only use new lumber when necessary. Careful planning allows us to work with you to develop an efficient design and order materials well in advance to avoid supply chain issues – sometimes storing them on site if space allows and savings will be realized.