Dropping to the lowest price they've been since January, lumber fell 4% on Friday to $689 per thousand board feet; this represents a dramatic drop over the last nine weeks after the prices topped out at $1670 on May 7th.
Business Insider reports that the price drops are coming, in part, due to a decreased demand in remodeling and renovation. "Our recent research … suggests a combination of high housing and wood product prices and the shift of expenditures to services in the reopening (from do-it-yourself [DIY] home projects) has negatively impacted new and repair/remodel construction expenditures," wrote Bank of America analysts on Friday.
Sawmills have increased production. Labor in the logging industry has rebounded since the pandemic
"The move-up [in lumber prices] was quick and violent, and the fall we have seen has been equally dramatic," Steve Loebner, director of risk management at Sherwood Lumber, told Fortune. "I think we are getting close to a trading level being established, which will bring in buyers off the sidelines and firm up the market. I don't expect a return to the hyper volatility on the upside we experienced earlier this year, but it's very reasonable to expect that prices will remain well above their historic norms overall."
The prices will likely not return to pre-pandemic levels anytime soon; they sat below $400 per thousand board feet. Experts believe the bear market will continue through at least the end of July.
However, destructive wildfires this season in the Pacific Northwest and British Columbia might impact the center of the North American lumber industry.
Although skyrocketing lumber costs have exacted a toll on construction, steady price decreases might represent an eventual return to near pre-pandemic prices.