Lumber prices are near all-time lows but could be headed for a rebound, executive says. 'We are extremely, extremely cheap'
How have high interest rates impacted housing permits?
High interest rates have led to a decline in housing permits as they have made homes less affordable, reducing demand. This has caused builders to construct fewer homes, resulting in a 41% decrease in approved housing permits in the first five months of the year compared to the same period two years ago.
What are current inflation-adjusted lumber prices compared to production costs?
Current inflation-adjusted lumber prices are 20%-30% below production costs, according to Sherwood Lumber COO Kyle Little2. Prices have been falling due to weak demand in the housing market and subdued construction activity.
How high did lumber prices peak in May 2021?
Lumber prices peaked in May 2021, reaching a high of $1,514 per thousand board feet. This surge was driven by a combination of increased demand for new homes, low interest rates, and a shortage of supply due to sawmills shutting down during the pandemic.