Overview of the current state of lumber prices, a couple of years after the 2022 spike.
Explanation of the recent crash in lumber prices.
Analysis of the factors contributing to the decline:
- Home builders cutting back on production.
- High interest rates.
- High home prices.
Discussion on the demand for housing:
- There are still people needing houses.
- Many cannot afford the high costs associated with new homes.
- Builders need to sell homes in the mid-to-upper $300,000 range, often reaching $400,000 or more.
- Typical mortgage payments for these homes can be $4,000 to $5,000 a month, including taxes and insurance.
Insights on the impact of high costs on home building:
- Builders cannot produce as many homes as before.
- Lower demand for lumber has led to reduced production by lumber yards, producers, and mills.
Current lumber price:
- Now below $500 per thousand board feet ($473).
- Comparison to previous prices:
- $1,500 a couple of years ago.
- Predicted to bounce along in the $800 to $900 range before falling.
Speculation on future lumber price trends and the sharp decline.
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