The elevated price of softwood lumber, a major talking point during much of the pandemic, appears to have peaked in early May at more than $1,700 per thousand board feet. As of June 23, the price has fallen below $900 per board feet, down about 49% in less than two months.
That’s still an unusually lofty price by historic standards—prices remain almost twice as high as in February 2020—but the trend is very much in the right direction. Builders who had been hoarding lumber have now begun to sell from their own inventory, other builders have delayed lumber purchases in anticipation of lower prices, and sawmill operators have been adding shifts and expanding capacity, all of which puts downward pressure on prices.
Copper prices, which have nearly doubled since the pandemic began, have fallen modestly in recent weeks as China released metal reserves and the Federal Reserve indicated a more hawkish stance on future rate increases. Further construction materials price dips are likely, particularly for metals like aluminum and zinc. Steel prices, with demand elevated and China curbing production, have leveled off since late May but remain nearly three times higher than pre-pandemic levels.
“The cure for high prices is high prices, which decrease quantity demanded in the short-term, increase quantity supplied and incentivize suppliers and sellers to bolster capacity in the long-term,” said ABC chief economist Anirban Basu. “Already there is evidence that output is on the rise, which has helped to trigger the price moderation process. That said, input prices will remain elevated by historical standards for at least several more months.”