Lumber futures dropped to $604.50 per 1,000 board feet on Wednesday to extend lumber’s price slump of about -47% this year.
“Lumber Markets Probing for a Floor”
Kevin Mason, managing director of ERA Forest Products Research, said, “Lumber markets are probing for a floor…” amid concerns for lower home sales volume and rising interest rates throughout this year. (Rising interest rates push lumber prices lower.)
Lumber prices have fallen by -47% from a recent high in early March, according to NASDAQ.com.
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Volatility in Lumber Prices
Lumber prices have seesawed since the onslaught of the pandemic. In May 2021, lumber futures hit an all-time high of $1,544/1,000 board feet and by August of 2021, lumber prices plunged back down to less than one-third of that peak price.
On top of lumber as a commodity in and of itself, labor shortages, insufficient warehouse space and a big uptick in new home construction starts have all contributed to the wide price swings for lumber
First American economist Xander Snyder pointed to pricing uncertainty and the escalation of overall costs for builders. In fact, the cost of construction industry goods and materials (lumber, concrete, drywall, etc.) increased nearly +12% in April 2022 y/y, according to the federal government’s Producer Price Index.
Mason speculated that lumber prices may drop into the range of $400/1,000 board feet over the next two months.
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