top of page

Lumber Price Volatility Cause Home Builders to Seek Sustainable Building Materials


  • In 2021, lumber prices skyrocketed due to supply chain issues and economic factors following C-19; reaching a high of $1,481.50 in May 2021.

  • In 2022, lumber prices fell and rose again to only begin a swift decline in price well into the new year. Lumber prices fell 66% last year - making it 2022’s worst-performing commodity.

  • Now, in Jan. of 2023, lumber prices sit at $420.20.

  • Rising mortgage rates caused the US housing market to stumble, which decreased demand.


Lumber prices have been on a wild ride for the last three years. Since the pandemic hit, builders, homeowners, and investors have seen the US Commodity rise to astronomical prices. In 2021, lumber prices skyrocketed to $1,481.50 in May, the cause of this sudden increase was the fallout of the pandemic. A combination of supply chain woes and an unintended demand in housing and construction caused a demand far greater than anyone could have anticipated. Since then, we saw lumber prices fall and return to their previous highs in 2022. However, halfway through 2022 lumber prices plunged around 66% into the new year. Through these intense price action and supply issues, Lin Merage has voiced its interest in alternative and sustainable building materials to replace lumber. But what has this dramatic rise and fall done to the existing home building and construction industry?


Interest Rates to blame for falling prices

The housing market across the US was hotter than ever before. Even some analysts speculated that the housing market was in a bubble that was about to burst amidst growing concerns of swift inflation. The Federal Reserve positioned itself to take on inflation and reached toward mortgage rates. Raising the rates, the average 30-year mortgage rate doubled in 2022 to 6.42%. With future moves planned by the FED to tackle the economy’s inflation, many market strategists believe Lumber pricing will continue to see downsides. Even though the prices continue to decline, many homebuilders are looking into more sustainable offerings that remain stable during trying times. Lin Merage has researched other sustainable building materials and it seems there is no shortage of options.


Top Alternatives to Lumber in Construction

Some of the top contenders to replace lumber in framing include:

  • ICFs (Insulated Concrete Forms)

  • SIPs (Structural Insulated Panels)

  • CFS (Cold Formed Steel) / Light Gauge Steel Framing

  • Structural Steel

  • Cellular PVC

  • Composite

  • Engineered Wood

  • Fiber Cement

  • Foam Core Panels

  • Welded-Wire Sandwich Panels

Total cost, availability, price stability, material durability, and installation familiarity are major decision-making factors for builders and contractors. When trying to job cost materials at the start of a project that may not be purchased until months down the line, the fluctuation in commodity pricing can be a deterrent, and cause a preference for wood alternatives such as SIPs and engineered wood options that are more price stable.

More Options Create More Opportunities

Here in Denver, the housing crisis continues to ravage the market and make many concerned with the uncertainty of an unsustainable population density. Having lumber create waves and delays in future construction is not desirable. Lin Merage already aiming to build with sustainable building materials hopes that the appeal of accessibility in alternatives will incentivize builders to use these sustainable options more. The more ubiquitous these options are, the more affordable and readily available they are to the general construction industry. Ultimately, utilizing sustainable materials that replace lumber will be a major step forward in sustainable construction.

2 views0 comments
bottom of page