As the price of lumber raced up to over $1,500 per thousand board feet in the spring of 2021, economists acknowledged that the supply side of the economy simply couldn’t sustain the housing demand rush unleashed by the pandemic. Of course, we’d later learn that… lumber was actually the canary in the coal mine for inflation at large. That predictive power is why economists and analysts alike are once again paying close attention to lumber. …Fortune reached out to Dustin Jalbert, at Fastmarkets. Here are his predictions:
- U.S. Single-family homes will fall 16% in 2023 and multifamily 7%
- U.S. lumber consumption will fall between 4% and 5% in 2023 (or 2.2 billion bf)
- Record volatility in lumber prices since 2020 is over
- British Columbia sawmill closures to wipe out production capacity of 1.5 billion bf
- Inflation— and mortgage rates—will fall in the second half of this year, edging closer to the Fed’s 2% target