If you’ve taken a stroll down the lumber aisle lately, you may have experienced a bit of sticker shock. Whether you’re looking to do a DIY project or build a house, the price spike has surprised many. The larger the project, the more it adds up. But luckily, the price of lumber is starting to come back down. Will that drop cause RV prices to drop too? Let’s take a look!
What Popped the Lumber Bubble?
The insane prices caused many homebuilders and DIYers to put off their projects. While home construction and home improvement sales have increased, there was an 8.8% decline in new home construction in May. At the same time, sawmills and loggers were trying to take advantage of such a hot market and meet the demand. A drop in demand and an increase in supply finally popped the bubble.
How Do Lumber Prices Affect the RV Industry?
When you walk into an RV, you’ll quickly notice how much of the interior uses wood. There’s a tremendous amount of wood behind the panels on your walls, under the flooring, and in your roof. The frames of RVs use an enormous amount of wood for support and flexibility.
Because lumber plays such a key role in creating RVs, an increase in lumber prices will directly cause an increase in the cost to manufacture RVs. While manufacturers may eat most of the cost at first, there comes a point where the manufacturer can’t continue to take a hit and must pass the cost on to the consumer. This is often when you start to see dealerships be less generous when it comes to offering discounts.
Are RV Prices Expected to Go Down Soon?
The RV industry has experienced unprecedented growth in recent years. Lippert Components Inc., one of the leading RV component distributors, reported a 108% year-over-year increase in sales in the second quarter of 2021. RVs are flying off the lots faster than many manufacturers can keep up.
The price of RVs rose due to a combination of the lumber prices and the insane demand. If consumers are willing to pay the elevated prices, manufacturers won’t likely back down simply because lumber prices have decreased. The only way we’ll see a price drop would be for the demand to drop off. If you start to see your local dealership lot filling up with RVs, that’s a sure sign the market is slowing down.
Will the Fall of Lumber Costs Affect Used RV Sales?
The fall of lumber probably won’t affect the used RV sales market. Used RV sales skyrocketed as those looking to purchase RVs were desperate to find an RV. However, the demand for RVs hasn’t slowed down. Used RVs are still a popular choice for those not wanting to wait.
However, as manufacturers catch up to the demand for new RVs, buyers will likely have more options. This will mean that used RV sales will slow down as many buyers opt for a new unit compared to a used RV.
It’s a good sign for consumers that the lumber prices are starting to go down. This likely means your DIY project may cost less, but don’t expect RV prices to drop anytime soon. The price of lumber is an important piece of the puzzle, but until the demand for RVs slows down, expect to pay a premium price for that shiny new RV. What home improvement projects are you looking forward to getting done with lumber prices dropping?
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