February Lumber Commodities Report

Looking at the markets this week and dimensional lumber was reasonably tame with essentially minimal to no gains across the spectrum. However, we still saw our composite average increase 4.5% week over week, and in this case, the blame lies entirely with OSB, coming in hot at an increase of nearly 30%. The reason is easy to pin down on this one: there isn’t much available inventory at distribution. The end of year flooding in Whatcom County and British Columbia, coupled with the blizzard at the start of the year, has severely impacted the ability to bring materials from the mills to distribution. So much so that most of our suppliers aren’t on the market at all right now.

Shifting to some positive news, the National Lumber and Building Material Dealers Association (NLBMDA) successfully lobbied for relief on Canadian softwood lumber tariffs, reducing them from 17.9% to 11.64%. I certainly don’t want to complain about any decrease, though it is frustrating that the administration had only just doubled the tariff in November, from 9% to the 17.9%. Still, any relief is helpful! The NLBMDA continues to lobby for eliminating the tariff entirely while also seeking to increase domestic supply.

Looking at the market outlook for housing in general, we are still seeing strong demand, both across the country and locally in our area. Inventory continues to be woefully insufficient compared with supply. Additionally, with rents increasing so rapidly, we expect to see an all-time high in the build-to-rent market.

Moving away from lumber, we still see a large amount of availability and lead time challenges across the spectrum. Windows are 2+ months out, and while some doors are seeing modest delays, others (especially select fiberglass models) are pushing 4 – 6 months. Paint shortages have been and continue to be problematic, with certain bases nearly impossible to order. Bases in paint affect what colors can be mixed, so if there is some flexibility on colors, we are still in good shape to supply paint in general.

While the housing market continues to be strong, we are not anticipating much relief for pricing or availability well into 2022, if not into 2023. Obviously, this is a disappointing outlook. Still, the security of such a low supply side (housing) and high demand at least provides some assurances that the sector, in broad strokes, will continue to remain strong.