Lumber Prices Drop 67% in 5 Months –Here’s How

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Written By Jim J Neal

Finally, the housing market seems to be returning to normal, which is easing pressure on lumber prices. But how long will this last?

For the first time in almost a year, lumber prices in the United States dropped below $500 per 1,000 board feet last Friday. This marked a 67% drop in lumber prices from January’s peak of $1,300/1000 board feet.

The long-awaited drop in lumber prices is mostly due to the housing market slowly returning to normal after the COVID-19 panic. The lumber supply was under significant pressure in 2020 and 2021 due to unprecedented demand and closures of sawmills.

These factors drove lumber prices to record highs, reaching over $1,700 per 1,000 board feet. The market has finally caught up to the fact that rising mortgage rates have slowed housing demand.

Eric Lipar, CEO at LGI Homes, stated that “we will probably be selling similar floor plans in future for less than we were over 24 months.” “But it will be the same as what it was two and three years ago because the last couple of years were just an outlier in terms of [home] pricing.”

Lumber prices are returning to pre-2020 activity levels as the housing market recovers, which is generally good news. Although there is still volatility in the market, lumber prices have rebounded somewhat since reaching new year lows on Friday and are now up 8.9 percent this week.

The slight increase in lumber prices should not be interpreted as a cause of concern. It is simply a sign that they will continue to rise. It was common for lumber prices to fluctuate between $200-$600 per 1,000 board feet before the pandemic. Builders have hope that the days when lumber prices were over $1,000 per foot and huge spikes are gone.

Did you miss our previous article…
https://tophouseimprovement.com/how-to/how-to-save-your-lawn-in-a-time-of-drought-or-water-restrictions/