Lumber prices may have peaked

[July 10, 2021]  By Kevin Bessler

(The Center Square) – It has been a roller coaster ride for lumber prices in the past year.

Prices soared after the pandemic led to shortages of lumber for home builders and do-it-yourselfers who were stuck at home doing home projects.

Prices may have leveled off, but remain high. Lumber still costs about 80% more now than it did before the pandemic.

The supply chain has been totally disrupted the last year and that is an underlying component,” said Ed Neaves, 2020 past president of Illinois Realtors. “Cabinets that usually took three weeks are now taking three months.”

Lumber mills shut down during the pandemic, just when demand was beginning to pick up. Now a labor shortage is hindering efforts to catch up.

Neaves doesn't remember a time when the lumber market was so volatile.

“Years ago we would a bid that was good for 90 days on lumber, today is it literally five days,” Neaves said. “So if you get a price for a house, it is only good for five days.”

Lumber futures traded back below $1,000 per thousand board feet in the last couple of weeks for the first time since the spring. Neaves said he believes it may take some time for lumber prices to drop at the consumer level.

“So the futures on the market may be coming down, but at the local level, where builders have to buy lumber and have to buy wood products, they haven’t dropped a bit and they do not see them dropping,” Neaves said.

The demand for lumber is expected to curtail over the summer as vaccinated adults are getting out of the house out traveling more, putting off those home projects.

Professional builders also have slowed down, facing delays in getting appliances and other essentials.