After peaking at more than $950 per thousand board feet in mid-September, framing lumber prices appear to be retreating.
Pointing to the latest report from lumber price information provider Random Lengths, the National Association of Home Builders (NAHB) said that lumber prices are just above $750 per thousand board feet. This marks a $200 per thousand board feet decline since hitting an all-time high in the previous month.
While lumber prices are down nearly 20% since mid-September, it wasn’t before they climbed 120% since mid-April.
Prices paid for goods used in residential construction climbed 1.8% in September, according to the latest Producer Price Index (PPI) report from the Bureau of Labor Statistics. Helping to raise costs was a 28.6% increase in prices paid for softwood lumber prices on a seasonally adjusted basis. According to the NAHB, the PPI for softwood lumber nearly doubled, rising 90.9%, over the past five months.
In August, the NAHB reported that the spike in lumber was adding more than $16,000 to the price of a new home, and has climbed to as much as a $17,000 increase in recent weeks. The end result is some builders having to take a hit on the price of a home that was agreed upon months prior to lumber hitting peak levels. In the meantime, LBM dealers have also tried to compensate on the price increases so they aren’t scaring off their pro customers.
The NAHB recently met virtually with Commerce Secretary Wilbur Ross and discussed solutions to lumber prices. This includes a push to increase mill supplies and a new softwood lumber agreement that would end tariffs that are more than 20% on Canadian lumber shipments into the United States.
Previously, the NAHB sent letters to Ross, U.S. Trade Representative Robert Lighthizer, and Zoltan van Heyningen, executive director of the U.S. Lumber Coalition, in an effort to address supply chain disruptions and tariffs. The NAHB also enlisted assistance from the White House.
Additionally, the NAHB said that it continues to urge members of Congress to help boost production by seeking higher targets for timber sales from publicly-owned lands and opening up additional federal forest lands for logging in an environmentally sustainable manner.