Lumber Prices Fall Back to Around Their Pre-Covid Levels

By Ryan Dezember
The Wall Street Journal
September 27, 2022
Category: Finance & Economics
Region: Canada, United States

Lumber prices have fallen to their lowest level in more than two years, bringing two-by-fours back to what they cost before the pandemic building boom. Lumber futures ended Monday at $410.80 per thousand board feet, down about one-third from a year ago and more than 70% from their peak in March, when the Federal Reserve began raising interest rates. …Now home builders say that cheaper wood is giving them wiggle room to offer buyer incentives and to trim prices without crimping their profit margins. …Paul Jannke of FEA forecasts that lumber consumption will decline by as much as 2.5% this year and up to 4.5% in 2023… [but] expects wood prices to be much higher than during previous downturns—in the $400s per thousand board feet. …The consolidation of North America’s sawmills by a few big firms, such as Canfor and West Fraser Timber Co., has hastened the speed at which production is choked back in response to falling prices and should buoy prices, said Håkan Ekström of WRI. [a WSJ subscription is required to access the full story]

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