The bubble has burst! Lumber prices are finally coming back down to earth after a spring where they doubled, then doubled again.
Timberrrr! The price of lumber is finally falling after setting an all-time record during May. Lumber futures dove more than 40% in the past month as demand dried up for $50 or $0 sheets of plywood.
Homebuilders like Brad Olinger had to tell customers the price of their new home would be going up by $30,000 or more just because of wood prices.
“It was $400 a year ago, and now it’s up to $1200 so it is three times the cost,” Olinger said. But now he and rehabbers are getting a break as lumber is now a bit more affordable again.
But from the doesn’t that stink file, while you shouldn’t expect a dramatic drop in the price of a new home. Other prices, from drywall to copper and steel remain near all-time highs, meaning the cost of construction is still higher than it was a year ago, and that stinks.
But with Americans now traveling again, instead of just working on their homes, builders are hopeful that decreased demand will finally mean lower prices for construction.
While this won’t reduce existing home prices, it should finally offer new home buyers a bit of a break, so you don’t waste your money.