Lumber prices dropped 5% on Friday to the lowest price since March and 37% since prices hit a peak in May. Lumber futures decreased for the eighth consecutive day on Friday to $1,059.20 per thousand board feet, according to Business Insider. Lumber prices peaked at $1,670.50 per thousand board feet on May 7, and the National Association of Home Builders estimates sky-high lumber prices add an average of $36,000 to the cost of a new home. One of the country’s largest lumber producers, Weyerhaeuser, says the high cost of lumber will not continue, but it will be hard to predict future prices due to increased demand for construction.
The CEO added that he believes the home-building and renovation boom could lead to strong wood demand for another decade, however.
"I don't think $1,000 lumber prices are the new normal," Stockfish told the Nareit REITweek 2021 Investor Conference. "With that being said, when you think about the amount of housing we're going to have to build in the U.S. over the next three, five, 10 years, that's a significant amount of demand for wood products."
Capital Economics commodities analyst Samuel Burman said in an April note to clients, per Bloomberg, that he expected lumber prices to fall to $600 even as demand for the commodity remains strong due to rising supply.
"Even though we expect lumber demand to hold up well for some time, we still think that a rebound in supply will lead to a sharp fall in the price of U.S. lumber over the next eighteen months," Burman wrote.