Industry insiders project lumber prices could remain elevated or go even higher in 2022.

After the top five North American lumber producers saw profits jump by over 2,000% between the second quarter of 2020 and 2021, the lumber bubble burst during the summer of 2021 and profits decreased for the same lumber producers by nearly 70% in the third quarter, according to Fortune. While lumber prices have recovered, they remain at record-high levels because, although DIY activity has scaled back, home building has stayed relatively strong.

The historically tight housing market—which saw home prices jump a record 19.9% between August 2020 and August 2021—has kept demand high for new construction, which, of course, requires lots of framing lumber.

Where are lumber prices headed in 2022? Many industry insiders tell Fortune prices could remain elevated—or go even higher next year. But there are two wild cards. For starters, if supply chain issues and shortages don’t let up soon it could slow down homebuilding next year. Additionally, the U.S. Department of Commerce plan to double duties on Canadian softwood lumber next year is already shaking up the market.

“The industry is digesting some new developments, such as additional cutbacks in harvesting in British Columbia, and an expected doubling of duties later this month on Canadian mills’ exports to the U.S… The former is another longer-term supply-side worry, while the latter represents a near-term oversupply concern, as Canadian mills rush shipments into the U.S. market ahead of the duty increase,” Shawn Church, editor at Fastmarkets Random Lengths, told Fortune.

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