When Lumber Prices Fall, Does it Make a Sound?

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lumber prices 2021

This spring when lumber prices hit a historic high of $1,515 per thousand board feet, fix and flip and new construction investors were, pardon the pun, floored. Just one year prior, lumber was $352 per tbf, so residential real estate investors were not only asking what on earth could be causing prices to ramp up so steeply?, but more importantly, when would these exorbitant lumber prices return to some semblance of normalcy?

The answer to the what on earth question is a bit tricky — mainly because supply chain issues related to the pandemic, increased housing inventory pressure across the country, and a sudden boost in new SFR construction starts, all converged in a perfect storm to get us to that $1,515 peak. The good news is, prices have been steadily dropping all summer long, with the price of a thousand-board feet sinking as low as $350 toward the end of August.

These new prices are wholesale numbers, of course, and may not immediately
translate into lower prices at the local lumber yard, but one lumber company
executive recently told Fortune Magazine opens in a new window that the drop should be fully passed
along to the retail side of the business by late August or early September.

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