Lumber prices are beginning to fall from their record highs.
According to data from the NAHB that was summarized in this article by NAR, lumber prices are beginning to come down from their pandemic-era highs. How far have they come down, and what effects will that have on new housing stock?
The Drop
NAR reports that the price of lumber has dropped by over 40% since early May (when its price hit its highest point). Tough prices are still inflated, they are expected to continue to come down and eventually normalize. The article goes on to say that price drops will be further helped when lumber hoarded by builders and manufacturers begins to be sold off or used.
The Effect
Builders and contractors have had to raise their prices in the short term in order to account for the increased cost of materials, and those increases should now begin to subside.
The article goes on to quote an industry expert who states that we will not see the increased price as a new normal, but that it will eventually return to a pre-shortage level. He goes on to state, however, that the amount of home construction needed to meet buyer demand over the next decade will spur a flurry of building and an overall increase in demand for lumber.
