After steady and unprecedented increases since the spring of 2020, the price of lumber is finally going down.
Way down.
According to various sources, overall prices have dropped more than 40% in the last month, at the very time that the country’s sawmills have decided to ramp up production.
That 40% drop is regarded as the largest decline in the history of the industry.
The framing composite index produced by the pricing service Random Lengths shows on-the-spot sales dropping by $122 to $1,324. “The pullback came just six weeks after the index rose $124 during the first week of May, its most on record,” notes the Wall Street Journal.
Mills have “buzzed back to life in a rush to sell wood for prices few would have imagined possible a couple of years ago,” the New York Times is reporting, in a move greatly contributing to an increase in national supply.
The sudden increase in sawmill production has brought the industry to a 13-year high.
From the other end, the demand for lumber has decidedly decreased with new home construction of by 8.8% according to the National Association of Home Builders, and home improvement sales off by 8.1% between March and May.
The overall price decline, according to analysts, is good news for the construction industry because it most likely means a coming end to both supply chain issues as well as panic buying.
By Garry Boulard
