Renovations costs are gonna be higher in 2021 due to wood product prices

Changes in wood product prices pushed costs of homes and renovations higher. “Prices for lumber and wood panels were up in December due to strong housing markets and limited capacity to increase North American production following a seasonal softening of prices in October and November”, said RBC Capital Markets analyst Paul Quinn.

Last summer people were forced to stay and work from home. And that helped to rise the interest in renovations and buying a bigger house. It looks like the situation will likely continue or be eclipsed in 2021.

“The price volatility and shortage of supply of some wood products means headaches for homebuilders trying to take advantage of the current strong market for new houses that is expected to continue in 2021. Cost of wood materials went down a little bit through October but you’re still talking about lumber prices three or four times the prices from a year ago. And now they’ve escalated right back up again”, said Kevin Lee, CEO of the Canadian Home Builders’ Association.

He says higher lumber prices this year have added as much as $30,000 to the construction cost of a typical 2,500-square-foot (232-square-metre) house in Canada.

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