Will Lumber Prices Surge in Hurricanes’ Wake?

The short answer is, unfortunately, it’s too early to tell.

According to NAHB economist David Logan, more time is needed to assess the storms’ short- and long-term impacts on both lumber supply and demand.

“Other factors are also at play right now, which further complicate things,” Logan said. “The wildfire outlook is uncertain at this point, and duty rates on Canadian lumber are being reevaluated and will not be finalized until mid-November.”

Historically, lumber prices have risen following natural disasters, but those increases were mainly concentrated within the storm-affected regions, according to NAHB Chief Economist Robert Dietz.

“Across the nation, there typically is no persistent impact [on lumber prices] over the medium-term,” Dietz said. “One of the reasons is that construction activity during the rebuilding process will often times partially offset the decreased demand for lumber in new-home construction.”

However, both economists noted that roofing materials nationwide could experience longer lasting price increases — potentially rising 10% or more.

Logan says asphalt shingle prices will likely “fly up because asphalt is a byproduct of crude oil, of which roughly 25% of U.S. refining capacity was recently taken offline.” So far, prices for crude oil have increased 6% since Hurricane Harvey made landfall.

Even before the rains of Hurricane Harvey had ceased, NAHB was focused on raising awareness of the potential effects on lumber prices and applauding legislative actions to postpone duties on Canadian lumber.

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Comments (3)

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  1. Brett Hanson says:

    Thank you for the positive note. Studying the Lumber market will be a challenge in the near future. I would like to have an economic view on how the box stores are going to go forward with purchasing materials for the 2018 year. And, how is this going to affect our availability.

    Appreciate your emails

  2. Steven A Murray says:

    I’ve been in the business since 1985. EVERY time there is a hurricane that damages an area severely…and Harvey and Irma made a definite impact…there is a surge in ALL the commodities. Then… the “law” of supply and demand hits a little later and … if you want it…you’ll have to PAY for it…IF you can get it!

    I’m in contractor sales in PA and seldom do we see terrible effects from a Hurricane. There can be flooding…but typically it’s NOTHING like is seen in the south where the country takes a direct hit! I just watch as the prices soar. Within the first week prices were on the rise. For instance…7/16″ OSB…a product that will sell like hotcakes in the wake of the restoration efforts….has already climbed by nearly FOUR dollars!

    In my humble opinion…those supplying the commodity items (lumber, plywood, OSB etc.) just sit back and make a lot of hay when the sun starts shining again! I’ve always been discouraged by the “opportunistic” reactions after a natural disaster. I’m a very optimistic person by nature but I’m also a realist. It’s always about MONEY…always!

    In about a year….things will be back close to normal….just waiting on the next “bump” in the weather!

  3. After Hurricane Andrew the cost of plywood went through the roof and became very difficult to obtain in large quantities for building a new home or large addition. I ended up waiting at times over a week for plywood at one point.
    I’m building 2 new homes this fall and have already secured my Zip Roof and Zip Wall a week ago. There is no way this won’t affect us. Between Harvey, Irma, Florida and Caribbean demands and what ever else comes down the pike , it will take a long while for this to calm down. Plan ahead!

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