OSB Costs Up More Than 500% Since January 2020

Industry News ,

Originally Published by: NAHB — July 14, 2021
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Framing lumber prices garnered more attention than any other building material over the past year as prices quadrupled between April 2020 and May 2021.  But even as lumber prices decline, the spotlight on lumber continues to crowd out the story of meteoric price increases of another wood product integral to the integrity of a building’s structure—oriented strand board (OSB).

The price of OSB has increased 510% since January 2020, exceeding the peak price increase in lumber by nearly 180 percentage points.  Although plywood panel prices have substantially increased over the past 18 months as well, the increases have been less than half those seen in the OSB market.  In addition to elevated prices, acute shortages have plagued the residential construction industry–particularly after the severe winter weather experienced in the south in February.

Prices and price fluctuations vary depending on use and location, with increases since the start of 2020 exceeding 650% for some OSB products.

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Oriented strand board accounts for the most wood product used in structural panel applications in new construction. For example, OSB accounted for roughly two-thirds of wood panels used in wall sheathing in 2019.[1] Depending on the location of a build, the thickness of OSB sheathing in wall applications is generally 3/8” or 7/16” (with some use of 15/32”).  The mill prices of these dimensions (shown below) have climbed an average of 491% since January 2020.[2] The “delivered” price of 3/8” thick OSB sheathing in Portland, Oregon has climbed an incredible 662% over the same period.

Oriented strand board is heavily relied upon in roofing applications as well.  Roof sheathing made of OSB made up nearly two-thirds of all roof sheathing in 2019.[3] As roof sheathing is intended to resist “racking” resulting from high winds or earthquakes as well as carry gravity loads of items such as snow, finish roofing, and people, OSB sheathing used in roofing is typically 7/16” and 15/32” thick.  In areas with minimal snow loads, building codes may allow for the use of 3/8” OSB.

In flooring applications, OSB may be used in a single-layer floor system as a combination subfloor and underlayment and is commonly available with tongue-and-groove (T&G) edges designed to prevent uneven wear. The most common wood structural panel installed in typical floor applications is 23/32” thick (installed at 24 inches on center). In the western United States, the “delivered” price of 23/32” T&G OSB has increased by 309%, 357%, and 432% in Phoenix, Denver, and Seattle, respectively.[4]

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As lumber prices recede, more attention must be given to the stratospheric price level of OSB.  The large share of OSB structural panels usage in new construction and the fact that, like framing lumber, it is integral to the completion of most residential construction should lead the market to shine a greater spotlight on OSB prices and scarcity.

[1] Builder Practices Survey data; NAHB calculations.
[2] Random Lengths; NAHB calculations.
[3] Builder Practices Survey.
[4] Random Lengths; NAHB calculations.