NAHB: Too early to know hurricanes’ impact on lumber prices
Editor’s note: NAHB shared the following post in its NAHB Now blog Wednesday.
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.