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Lumber prices fell for the eighth straight day on Friday to near $1,000 per thousand board feet for the first time since March in a reprieve for ailing homebuilders and renovators.
Lumber futures fell 5.61% to trade at $1,059.20 per thousand board feet on Friday.
Rising lumber prices in 2021 have hit homebuilders, buyers, and renovators hard, pushing up the cost of an average single-family home by some $36,000, according to the National Association of Homebuilders.
Lately, though, lumber has fallen back down to Earth as the historic rise appears unsustainable—prices are now down roughly 37% from their May 7 peak of $1670.50 per thousand board feet.
Devin Stockfish, the CEO of Weyerhaeuser, one of the world’s largest private owners of timberland, said lumber prices over $1,000 aren’t likely to continue in the near term at a recent Nareit conference. The CEO added that he believes the home-building and renovation boom could lead to strong wood demand for another decade, however.
“I don’t think $1,000 lumber prices are the new normal,” Stockfish told the Nareit REITweek 2021 Investor Conference. “With that being said, when you think about the amount of housing we’re going to have to build in the U.S. over the next three, five, 10 years, that’s a significant amount of demand for wood products.”
Capital Economics commodities analyst Samuel Burman said in an April note to clients, per Bloomberg, that he expected lumber prices to fall to $600 even as demand for the commodity remains strong due to rising supply.
“Even though we expect lumber demand to hold up well for some time, we still think that a rebound in supply will lead to a sharp fall in the price of U.S. lumber over the next eighteen months,” Burman wrote.
Read more: ‘If lumber crashes, stocks …read more
Source:: Business Insider