Is it more expensive to produce paper from recycle paper or lumber?

Well this question is very broad. Especially because almost anything than can be

recycled (plastic bottles, newspapers, etc) has some amount of recycled material

in it.

It would be better to ask (if even a good question in itself) why does it cost more to buy 100% recycled paper.

That answer is simple. The process of recycling may be more expensive than simply acquiring the raw materials needed for creating an item.