What's going on with lumber prices this year?

There's been a 23% drop in spot lumber prices so far this year, falling to $882 per 1,000 board feet as of Thursday. Prices have softened as higher interest rates cool a red-hot housing market. The pullback follows a massive rally last year that pushed lumber to a high of $1,733 in May before settling up by more than 30% last year.

Why are lumber futures falling?

Prices for lumber futures have descended to levels not seen since November 2020, erasing this year's dizzying gains amid a cooling demand for the red-hot commodity. Lumber prices fell for the 10th consecutive week to trade at $536 per thousand board feet — 67% lower from their May 7 peak of $1,670 per thousand board feet.

What will the lumber market look like in 2023?

Our current trajectory model suggests that by 2023, housing starts will average 1.262 million units, remodeling will increase at 4.8 percent annually and GDP will increase at 2.3 annually. In this scenario, annual demand for lumber will increase to just under 52 billion board feet (BBF).

Why did lumber prices rise in the Sunbelt?

Katz said the Sunbelt states could continue to see heightened lumber prices as people move to the region from other parts of the US and drive up demand for housing. Lumber prices at the start of the year surged, triggered by factors including concerns about an overheating housing market and millennials reaching home-buying age.