Still, experts think the lumber market will run hot for years
If Reddit convinced you to invest in lumber last month…we have some bad news. Lumber futures posted their biggest weekly drop ever last week and continued to decline yesterday. Now at <$1,000 per thousand board feet, prices are down almost 41% since May’s record high.
What’s going on? Demand for homebuilding across North America strained supplies, sending prices skyrocketing. But sawmills have increased output (+5% over the last year, and another 5% increase is expected ahead), and now more buyers are balking at historically expensive wood.
- For context: Since the early ’90s, lumber futures have mostly traded between $200 and $600.
Is higher-priced lumber the new normal?
Lumber market experts think so—at least in the mid-term. Strong demand will probably keep lumber prices above pre-pandemic levels for at least 1–2 years, according to BMO analyst Mark Wilde.
Big picture: Robbers have traded bank branches for lumberyards and construction sites. Even with the recent drop in prices, a plank of Douglas fir remains one of this market’s hottest commodities.