Lumber prices are … falling

Green Escrow | New construction, housing

Finally, some good news for homebuyers, particularly those interested in a new single-family dwelling. While the National Association of Home Builders estimated that high lumber prices added approximately $18,600 to the price of a new home in the past year, lumber prices are now falling … fast!

Lumber prices have fallen 47 percent since the beginning of 2022 – and 12 percent in the last week alone. Analysts say this is due to lower demand which has created a glut in the lumber market. The hope is that the volatility in the lumber market is a thing of the past and a more stable market will emerge.

Lumber prices continue to skyrocket

Green Escrow | New construction, housing

As if the low housing inventory wasn’t bad enough – especially in the Bay Area – a severe lumber shortage, made considerably worse by the pandemic, is slowing new home construction. A number of lumber mills closed for good during the Great Recession and the stay-at-home orders during the pandemic made the situation that much worse.

Lumber futures have increased by over 540 percent in a little over a year! Analysts say this will result in a $35,900 increase in the average cost of a new single-family home.

While lumber mills are finally amping up operations, experts warn that a shortage of imports from Canada and the high cost of diesel fuel – needed for logging trucks – will continue to have an adverse effect for the foreseeable future.