Soft Lumber Prices Fall to Pre-Pandemic Rate
New York, NY, September 28, 2022-"Lumber prices have fallen to their lowest level in more than two years, bringing two-by-fours back to what they cost before the pandemic building boom and pointing to a sharp slowdown in construction,” according to the Wall Street Journal.
This is soft framing lumber, not hardwood lumber.
“Lumber futures ended Tuesday at $429.30 per thousand board feet, down about one-third from a year ago and more than 70% from their peak in March, when the Federal Reserve began raising interest rates to fight inflation.
“Wood prices crashed in the early days of the 2020 lockdown, but they exploded that summer when stuck-at-home Americans remodeled en masse and suburban home sales surged. Two-by-four prices nearly tripled the prepandemic record in an early sign of the inflation and broken supply chains that would bedevil the economic reopening.
“But lumber has led the way down for commodities since the central bank took aim at rising consumer prices and the overheated housing market. For two years, climbing lumber costs lifted home prices. Now home builders say that cheaper wood is giving them wiggle room to offer buyer incentives and to trim prices without crimping their profit margins.
“Wood-pricing service Random Lengths said Tuesday that its framing-lumber composite index, which tracks cash sales in several species, fell to $520, down more than 60% from early March. Now that supply issues have eased and the highest mortgage rates in more than a decade have slowed home sales, buyers are no longer hoarding lumber for fear of running out.
“‘All the urgency over the past two years-‘give me everything you can’-that’s basically over. Lumberyards are not scared of the price going up,’ said Michael Goodman, director of specialty products at wholesaler Sherwood Lumber Corp., which his family owns and operates. The Melville, New York, distributor sells framing lumber and plywood to building-supply companies, truss manufacturers and shipping-crate makers around the country. “The sexy lumber world is coming to an end, unfortunately,’ he said.”