At one point this spring, lumber prices were up over 300%. That’s ancient history now. Not only has lumber corrected, but it has swung all the way back to 2018 price levels.
The “cash” market price is down to $463 per thousand board feet, according to data provided to Fortune this week by Fastmarkets’ Random Lengths, an industry trade publication. That’s down 69% from its $1,515 all-time high in late May—and down 47% on the year.
That cash price and the futures price—which is down a similar amount—are both wholesale prices. And those cuts haven’t fully trickled down to the retail side. But in recent weeks, the markdowns are finally starting to pass over into retail.
“We are seeing substantial changes in the selling prices at the retail yards as it pertains to lumber, with panel items soon to follow. It looks as if the stars and planets have aligned to allow for DIY and R&R [repair and remodel] to get back into the mix right in time for normal seasonal demand,” Kyle Little, COO at Sherwood Lumber, tells Fortune. “The building industry’s wish has been granted.”
But when will the wholesale dips be fully marked down in the aisles of big-box retailers? That should occur later this month or in September, Little tells Fortune.
As Fortune has previously reported, many retailers bought lumber during the height of the run—when it was over $1,000—and were hesitant to off-load inventory below that price. That resistance to take a loss has helped to slow down the price declines on the retail side. But as more lumberyards and retailers lower their prices, others are forced to follow suit, says Ashley Boeckholt, cofounder of MaterialsXchange.
Industry insiders don’t foresee another spring-type lumber run. However, they say, there’s nothing that guarantees these price declines will stick. After all, a bad wildfire season is currently raging in British Columbia—the epicenter of North American softwood lumber. Additionally, this bursting lumber bubble was caused on the demand side as DIYers stopped buying once lumber got too high. It’s possible these DIYers are simply waiting on the sidelines for prices to fully correct. If they all rush back at once, it could cause another surge.