Lumber price falls to $399—down from $1,515 this spring

“No bottom yet,” Shawn Church, editor at Fastmarkets Random Lengths, tells Fortune.

Since peaking at $1,515, an all-time high, on May 28, the cash market lumber price is down a staggering 74%.

Not only has the bursting lumber bubble erased all of its 2021 gains, but it has also sent prices all the way back to 2018 levels. Prior to the pandemic, the price usually ranged from $350 to $500. We’re now at the lower end of that spectrum.

But keep in mind the cash market price is a wholesale price—not what you’d pay in the aisles of Home Depot or Lowe’s. That retail price has been slower to come down. However, in recent weeks it is finally starting to fall. Kyle Little, COO at Sherwood Lumber, tells Fortune that by September the wholesale drop should be fully reflected on the retail side.

So what should DIYers do if they encounter two-by-fours that are still marked up? Ashley Boeckholt, cofounder of MaterialsXchange, tells Fortune they should either wait for better deals or shop around.

“Call people a little farther away and ask about pricing. Don’t be afraid to ask for a better price,” Boeckholt says.

As Fortune has previously explained, this historic lumber shortage was spurred by a perfect storm of factors set off during the pandemic. When COVID-19 broke out in spring 2020, sawmills cut production and unloaded inventory in fears of a looming housing crash. The crash didn’t happen—instead, the opposite occurred. Americans rushed to Home Depot and Lowe’s to buy up materials for do-it-yourself projects, while recession-induced interest rates helped spur a housing boom. That boom, which was exacerbated by a large cohort of millennials starting to hit their peak homebuying years, dried up housing inventory and sent buyers in search of new construction. Home improvements and construction require a lot of lumber, and mills couldn’t keep up.

What changed? DIYers got fed up with the sky-high lumber prices—which at one point were up over 300% this spring—and started to cancel their projects. That reduction on the demand side occurred as sawmills, which hoped to cash in on the exorbitant price of lumber, upped their production. Of course, reduced demand and increased supply is a recipe for a strong price correction.

“Supply and demand dynamics worked,” Home Depot COO Ted Decker said on an earnings call this week.