Volatile lumber prices have plagued weary builders throughout much of the COVID-19 pandemic, but as interest rates rise, demand for lumber is falling, and prices are following suit. Lumber prices per thousand board feet were down from the January high of $1,329 to $651 on Wednesday, and some experts say that the boom and bust cycles could at last be behind us, Fortune reports.
As long as demand continues to steadily decline while supply starts its upward climb, lumber prices are expected to moderate between between $450 and $600, but greater market balance means they likely won’t touch the 300% gains seen during the pandemic, and they also won’t collapse.
“It is our belief that we are past peak demand, and this commodity bull wave is over,” Kyle Little, the chief operating officer at Sherwood Lumber, told Fortune via email. “It is now moving to its next cycle.”
Little posed the question: “What does the price of lumber or even housing do in an environment where demand is flat to down and supply is slowly rising?”
The obvious answer? Prices decline.