Unstable Lumber Costs in the Post-Covid Era Relative to the Price of Steel Leads to Steel Homes as the Only Logical Solution for Homebuilders
Running a homebuilding business can be incredibly tough, especially in a cyclical industry when input costs are inherently unstable and subject to wide fluctuations. There are many reasons to build steel homes in lieu of traditional wood construction, and one of them relate to material pricing. Lumber costs continue to escalate relative to the fairly stable price of steel. Most people are familiar with the inflationary pressures that followed COVID-19. Some attributed them to excessive stimulus during the pandemic, while the National Bureau of Economic Research identified rising commodity prices and supply chain disruptions as the primary drivers of inflation. However, a deeper analysis and a quick examination of post-Covid prices of commodities paints a different picture.
According to Trading Economics, lumber costs skyrocketed by an astonishing 538% between March 30, 2020, and May 3, 2021. In comparison, the price of steel rose by a much more modest 61%, despite facing the same macroeconomic pressures. In addition to the numerous performance advantages of steel as a constructional material, this pricing volatility played a key role in the shift toward steel for homebuilding during that period. Though this period was characterized by post-Covid related disruption and excessive government period, both leading to almost unprecedented inflation, it is clear that lumber costs were far more impactful for homebuilders compared to those that might had opted and built steel homes instead. What came later was even more revealing.
Fast forward to 2024, and even without exogenous factors like a global pandemic, lumber prices are inexplicably on the rise once again. Year over year, lumber prices have increased 20%, but the real extent of the problem is even greater. From July 15, 2024, to November 19, 2024, lumber prices skyrocketed 47%, according to Trading Economics. During the same period, the price of steel remained stable, with only a 1% increase.
Fortunately, there is a better option for homebuilders looking to avoid the volatility of lumber costs: cold-formed steel. With its consistent pricing, superior performance, and long-term reliability, steel provides a solution to the unpredictability of traditional materials like lumber.
Ready to Make a Switch And Build Steel Homes on Your Own?
Scottsdale Construction System enables rapid building of steel homes with its complete ecosystem of software-enabled steel framing roll former machines. With our advanced steel framing technology, training and support, and a wide array of roll forming machinery selections, we can address any particular training framing focus, be it steel homes in residential construction, multi-family developments, commercial framing, and much more.
If you are interested, please contact us through our website, e-mail us at rollformers@scottsdalesteelframes.info, or call us at 1 (888) 406-2080 to learn more and get started!
