Lumber Prices Plunge 24% as This Year’s Homebuilding Season Falls Short of Expectations
Lumber prices have decreased by 24% from their mid-March peak due to subdued home-building activity. Both U.S. housing starts and new building permits have declined this year, with drops of 4% and 6% respectively in May. Industry experts attribute the falling prices to a combination of oversupply and decreasing demand for lumber.
According to Business Insider, lumber prices have plunged this year as the peak home-building season falls flat amid subdued demand.
The essential homebuilding commodity has seen futures pricing plunge 24% from its mid-March peak to $473 per 1,000 board feet.
The sharp decline is an about-face from the start of the year, when lumber brokers were excited about 2024 prospects for the commodity due to a US housing market that is sorely in need of new homes.
“We entered 2024 with optimism for the year to come with a housing deficit that needs to be filled, commodity lumber and structural panel prices reset to a pre-covid range, and a Fed that stopped raising interest rates with hopes of many cuts to come,” Sherwood Lumber senior vice president Josh Goodman told Business Insider.