Lumber Prices are Finally Beginning to Drop

After the steady rise of lumber prices over the last year, we are finally beginning to see a shift in the other direction. The price per thousand board feet of lumber peaked at an all-time high of $1,515 on May 28th and has steadily been decreasing over the last eight weeks. This is the lowest general price point for lumber since June 2020. This change is due to a few factors, but it is rooted in supply and demand.

As demand for lumber rose among DIY and construction projects alike throughout the Covid-19 pandemic, the demand was unable to keep up, which drove the prices to the peak in May. This demand caused suppliers to increase production, which has now created a surplus of lumber that is more than enough for the current demand, which leads to steadily declining prices. It is worth noting, however, that despite this recent decline lumber prices are still up 211% from a year ago during spring 2020.

“For the eighth consecutive week, the price that sawmills charge distributors for lumber is down. Last week, the “cash” market price of lumber fell $90, to $485 per thousand board feet, according to data provided to Fortune by Fastmarkets Random Lengths, an industry trade publication. That’s down 68% since its $1,515 all-time high in late May. That’s the lowest price point for lumber since June 2020.

“The market is probing for a bottom, but it has been elusive so far,” Shawn Church, editor at Fastmarkets Random Lengths, told Fortune. “The market is nearly back down to its historical range.”

Prior to the pandemic, lumber prices usually floated in the $350 to $500 per thousand board feet range. Some in the industry had thought elevated demand during the pandemic and the historic housing shortage might mean prices would never fall back into that range. But here we are.”

https://fortune.com/2021/07/26/lumber-prices-bubble-cost-wildfires