Lumber Prices Trending Downward from Mid-September Peak but Still High

Filed in Advocacy, Economics, Trade, Trends by on October 16, 2020 10 Comments

lumberFraming lumber prices peaked above $950 per thousand board feet in mid-September, according to Random Lengths, and have been on a slow, downward trajectory since then. For the week ending Oct. 16, prices stood above $750 per thousand board feet, down nearly $200 since their all-time high last month.

Since mid-April, lumber prices have soared nearly 120% but are down roughly 20% since mid-September. This unprecedented lumber price spike over the last several months has added nearly $16,000 to the price of a typical new single-family home.

The price peak and subsequent gradual decline appear to have coincided with recent actions by NAHB. In August, letters were sent to President Donald Trump, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer calling on the administration to take prompt action regarding soaring lumber prices and supply shortages that are harming the housing sector and the economy.

NAHB urged the White House to call on domestic lumber producers to ramp up production to ease growing shortages and to make it a priority to work with Canada on a new softwood lumber agreement that would end tariffs averaging more than 20% on Canadian lumber shipments into the United States that are increasing price volatility. A similar message was sent to the U.S. Lumber Coalition with a request to work together to address shortages in the lumber supply chain caused in part to the COVID-19 pandemic.

At the end of August, NAHB Senior Officers held talks with members of the White House National Economic Council to discuss the impact that soaring lumber prices are having on the housing industry and to press for immediate action. At the end of September, the NAHB leadership reiterated strong concerns regarding the lumber supply situation in a virtual meeting with Commerce Secretary Ross.

On the congressional front, NAHB continues to urge lawmakers to help boost production by seeking higher targets for timber sales from publicly owned lands and opening up additional federal forest lands for logging in an environmentally sustainable manner.

NAHB members have also contributed significantly to this effort through a massive grassroots push and letter-writing campaign to members of Congress that resulted in nearly 6,000 emails that were sent to more than 400 congressional offices.

Based on the lumber price trend over the past six months, NAHB’s ongoing efforts appear to be bearing fruit. But the battle is far from over. NAHB will continue working on all fronts to find solutions that will ensure U.S. home builders have access to a stable supply of lumber at reasonable prices to keep housing affordable for hardworking American families.

NAHB economist David Logan provides further details on the latest lumber prices and other key building materials in this Eye on Housing blog post.

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Comments (10)

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  1. David Moore says:

    Glad to see those lumber prices coming down. The future looks brighter as does the economy of or Great Nation – the greatest Nation on Earth!

  2. Kevin Compton says:

    I seen on NHBA that drywall dropped to 3.5% of the build for 2020,2019 was 4.5% can someone explain that when materials went up,also I’m a 2nd generation drywall contractor and it used to be 8% to 12% of the build when ceilings were 8′ and they still cased doorways and windows with wood,please make an article on this.

  3. Lumber prices still need to come down significantly to reach normalcy. This is not over by any measure, however, we have a few customers that have moved forward on their MF projects despite lumber pricing.
    Rick

  4. Brad Lafountain says:

    I would gladly pay higher lumber prices to US producers rather than ship money over seas or across the border.

  5. charlie Sanders says:

    stay after it. great news

  6. Kurt Welker says:

    While the graph says retail prices have started to soften, I have not seen it at the retailers in Minnesota yet.

    • Don Simons says:

      That is because all the retailers have purchased lumber not only weeks but months ahead at the higher prices. I don’t expect we’ll see lower lumber prices for a while. As a lumber seller or truss or wall component manufacturer, you better hope not or your going to lose your shorts for some time to come. Those who didn’t buy well out in front or had the ability to do so probably lost money when the lumber was on the way up trying to keep competitive with bigger companies that could and held pricing down by averaging of however they set pricing. Then just like the covid toilet paper run everyone panicked and purchased a bunch of lumber driving the supply and demand even further. I think part of the drop in pricing has more to do with that more toilet paper was purchased than needed and now holding out for a bit to see what comes of it.

  7. Wayne Mayo says:

    It’s usually supply/demand. But this time the fires, the bonus unemployment check, the China Virus, it all played into the jump. Couldn’t get workers to come back to work in some cases.

    a 3% drop in supply can. use lumber prices to climb 20%,

    This year has been the perfect storm.

    Prices will come down.

  8. William Brackbill says:

    I am a small independent builder. 8 houses per year. I was lucky to get one house framed including the decks at July pricing before lumber shot up in August. Price on home is $1,150,000. After a 6 week delay waiting for windows I am now hanging sheetrock, and negotiating a contract on the home. I have one slab sitting, another one pouring tomorrow. 2 slabs with rough plumbing going in and grading another. I will have 5 slabs sitting waiting for lumber to drop in price if I have to wait until January. The large tract builders can plow through paying market prices as they get 3-4 inventory turns per year on 90-120 construction schedules and can average out their prices paid over the year. I cycle once per year so I cannot afford to buy at top of cycle.

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