Summer is not over yet, and lumber futures prices are falling. We happened to publish our last article about lumber nearly at the peak of this year’s lumber price (May 7, 2021 closed at $1,678 per thousand board feet). As of July 9, 2021, lumber closed at $702.50, a 58% decrease from this year’s peak – although still higher 30% year-over-year.
I’m in the market for some remodeling, but I may wait a little longer. Homebuilders and remodelers begin to get price relief once mill prices have substantially decreased or stabilized for an extended period. Prices must fall for long enough to materially lower a supplier’s average costs after a run-up. Depending on the rate and consistency of price decreases and whether prices have stabilized at the lower level, it may take a few weeks to a couple of months for builders to see price relief.
The pandemic stressed supply chains. However, productivity is turning around. Supply seems to be catching up with demand, which has been softening as many people are working away from home once again. Meanwhile, homebuilder confidence is low due to the rising cost of lumber. Building projects have become too expensive for many families. As I’m hoping for, a little patience with my remodeling aspirations might be rewarded.