Lumber prices fell to $429.30 per thousand board feet on Tuesday, down roughly one-third from a year ago and more than 70% below their March peak, The Wall Street Journal reports. Elevated lumber prices were an early indicator of runaway inflation in the U.S. economy throughout the pandemic, especially as they sent prices for newly constructed homes to record highs.
As supply chain disruptions are finally resolved and surging mortgage rates sideline budget-conscious buyers, falling lumber prices signal a slowdown in new construction in the months ahead. Building permits for residential construction projects have steadily declined since March, and amid decreased demand, the lumber industry is bracing for a recession.
“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, N.Y., 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.