The price tag for a new healthcare facility or renovation project has been unusually high over the past couple years, and lumber prices have been a major contributing factor. Lumber prices have experienced high amounts of volatility over the past year. From the beginning of the pandemic, lumber prices have been more volatile than almost any other time in history, leading to some major headaches for those seeking to develop new building projects.
The good news? With interest rates rising and the housing market cooling, demand for lumber is finally subsiding. That means it may finally be time to start that healthcare project you’ve been putting off.
Lumber Prices Finally Trend Lower
The Covid-19 pandemic affected countless industries worldwide, healthcare being a big one. Exorbitant lumber prices meant that hospital renovations, repairs and new construction were all much more expensive, affecting the overall cost of building projects across the board. Two years after the global shutdowns, the cost of lumber finally seems to be decreasing toward pre-pandemic levels. This is exciting news for healthcare architecture and design!
Why So Expensive?!
At the beginning of the pandemic, the cost of lumber and other building materials skyrocketed due to a variety of factors. First, lumber mills were forced to close or reduce their production capacity during the emerging global health crisis. Second, many people undertook DIY and renovation projects in 2020 because they were spending more time at home or working from home. Inflation further affected the cost of lumber.
The Impact of Lumber Costs on Building for Healthcare
Wood is a common material used throughout many healthcare facilities in America. The average healthcare facility could have easily required millions of dollar’s worth of lumber at its peak. Without a doubt, the cost of lumber has a significant impact on the healthcare industry.
Is the Bubble Bursting?
It has been a long two years of price increases, but the lumber bubble does seem to have finally burst. What has caused this decrease in prices? As we mentioned, rising mortgage rates and inflation have contributed to the housing market beginning to cool down. New homes are seeing less demand, and the cost of lumber has finally begun to fall as a result. As of writing this, lumber prices have decreased nearly 50% since this time last year.
While prices may be lower now than they were in the last couple of years, we are naturally concerned about continued instability. The good news is that experts are predicting that – barring another major worldwide crisis – lumber prices should stabilize in the coming months.
Interested in learning more about how falling lumber prices might affect your next project? Click here to see how we can help!