Here’s a brief update on where lumber prices are at after peaking in May.
Today I’m going to talk about lumper prices. The great lumber bubble of 2021 has popped. After a jaw-dropping rally this spring, lumber prices have come back down to earth as supply increased, speculative trading action cooled, and home-building demand eased. Lumber futures tanked more than 40% in June alone, suffering their worst month on record since 1978.
At their peak on May 7, a 200-square-foot deck would have cost you $4,000 to build. Pre-COVID, it would have only cost you $935. The quick reversal of lumber’s months’ long rally came to an end amid the economy reopening and people deciding to go on vacations instead of spending money on renovations and expansions.
Many who are fearful of persistent inflation took comfort in seeing the decline in price and the cooling demand. Now, lumber futures prices have wiped out their entire 2021 rally. Lumber prices are still double the cost of what they were pre-COVID, but the bubble has burst.
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