Let’s Talk… Decrease in the Price of Lumber!

The past few months we have seen record high lumber prices and shortages across the country, but now the price of lumber is finally dropping. Why is that? Let’s take a look. 

If we look at the price of lumber these past few months we see that it rose over 400%. This pushed lumber to a price point that could not be sustained for very long. With such high prices, we are seeing a push back in the market, by halting the building of homes or not building at all. At the same time, the record prices incentivized a supply increase with US wood production hitting a 13-year high in April. 

This price volatility, combined with rising supply and weakening demand, is leading to the price adjustments, or price falls, that we are seeing now. 

As we are now approaching a new normal, we are going to see the price of lumber drop to a lower price, but still higher than in the past. This new pricing floor with lumber will become the new norm for a while into the future. However, with this new price, we will see more housing demand in our booming housing market. 

What do you think? Let me know your thoughts!

The content in this material was created for educational and informational purposes only and is not intended as an investment advice.

The opinions voiced in this material are for general information only and not intended to provide specific advice or recommendations for any individual.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.