Lumber price drop could be beginning of stabilized housing market

U.S. & World

COLUMBIANA, Ohio (WKBN) – Lumber prices soared during the height of the pandemic. And while the health crisis is not over, lumber prices are coming down.

Joe Koch, of Joe Koch Construction in Austintown, said prices have come down 40% since June.

He said if you’re building a $300,000 home right now it would bring the cost down $20,000 to $30,000.

“Like every other contractor, we definitely felt the crunch once things were spiking. Every day you’d talk to our lumber supplier and it was a 5% increase here, 10% increase there,” Koch said.

At the height of the price increase, a 16-foot, 2X4 was about $22. Now, it’s down to $8.

“It was a real punch in the nose, and it made it difficult for contractors. It made it difficult for homeowners. It really put the banks in a difficult position because they are lending that money out. The money didn’t go as far, so it caused some real issues,” said Bob Holmes, owner of M.E. Lumber Supply in Columbiana.

Despite the challenges and price increases, both Koch and Holmes said they’ve been busy.

“We’re finishing up some very wonderful projects that we had the privilege of building, and we expect to start two more new homes yet this fall before winter kicks in,” Holmes said.

Koch said they are as busy as ever and never thought that almost two years into a pandemic that they’d be in the position they’re in, so he’s counting his lucky stars. He expressed his thoughts on where he sees things going for their industry.

“As long as there is a low-interest-rate environment and prices stabilizing, which is what we’re seeing through the lumber market, I do see some good things ahead as far as in the housing market,” Koch said.

Koch also mentioned that they’re seeing an increase in prices for plastic and steel. For the future to look even brighter, those prices would have to come down but only time will tell.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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