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Lumber Prices Are Down but Homebuyers Still Aren’t Saving

·2 min read
jdwfoto / Shutterstock.com
jdwfoto / Shutterstock.com

Lumber prices took another dip, falling by more than 50% over the past few months. However, CNBC reported that homeowners, homebuilders and homebuyers hoping to renovate aren’t seeing any savings. Lumber prices reached an all-time high May 7, at $1,670.50 per thousand board feet on a closing basis. According to CNBC, this was six times their low during the pandemic in April of last year.

See: Lumber’s Losses Could Be a Sign of an Improving Economy
Learn: 7 Easy Home Renovations for $5,000 or Less

Throughout the pandemic, the supply of homes on the market couldn’t keep up with the demand. Saw mills closed at the start of the pandemic, layoffs reduced production of timber and lost revenue; all of which helped push the price of lumber up.

According to the National Association of Home Builders, price changes for softwood lumber products between April 17, 2020 and July 8, 2021 have added $29,833 to the price of an average new single-family home, and $9,990 to the market value of an average new multifamily home. However, these numbers are down from April 2020 to April 2021 when the NAHB reported a $35,872 increase in the average house price. Lumber prices are still up 100% from the spring of last year, reports CNBC.

David Logan, senior economist at the NAHB, told CNBC that lumber prices being quoted to homebuilders is still at record highs. While there have been supply chain issues and low inventory, strong demand has given retailers the opportunity to keep prices high. This may change in the coming months.

Economy Explained: Why Supply and Demand Is Important to You
More: What Do the New Home Sales Reports Mean and What Is Measured?

“Everyone is going to try to hold on as long as they can, but the market is going to find its way. Maybe in the end the price is higher because of inflation, but we are definitely in a housing boom now. That doesn’t seem to be going away,” explains Michael Goodman, director of specialty products at Sherwood Lumber, a national wholesaler and distributor in Palmer, Massachusetts, reports CNBC.

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Last updated: July 20, 2021

This article originally appeared on GOBankingRates.com: Lumber Prices Are Down but Homebuyers Still Aren’t Saving