The price tag on lumber, after declining since its all-time high in May, could climb higher through the early months of the coming year, experts recently told Insider.
The outlet reported Saturday:
Lumber futures as of October 8 were hovering around $713 per thousand board feet – still 58% lower than the record high of $1,711 achieved in May as supply chain disruptions and demand for housing drove an incredible boom for the commodity. A year ago, the lumber futures were trading at roughly $586 per thousand board feet.
But after prices bottomed out below $400 per thousand board feet in late August, they have since recovered by $100 per thousand board feet in just over a month, data from Fastmarkets Random Lengths Framing Lumber Composite Price showed.
Meanwhile, President Joe Biden’s inflation is reportedly costing the average American household an extra $175 a month.
“For households earning the U.S. median annual income of about $70,000, the current inflation rate has forced them to spend another $175 a month on food, fuel and housing,” chief economist for Moody’s Analytics Mark Zandi said recently.
“That’s the equivalent of a full grocery, electric or cellphone bill,” Zandi continued.
In addition, global food prices have hit a decade high and grew for the second month in a row in September, according to a report from the Food and Agriculture Organization (FAO).
A reason behind the price growth regarding lumber was a small increase in renovation demand once “price-sensitive” buyers moved forward with home improvement projects since wood prices experienced a substantial correction, according to Justin Jalbert, a senior economist for Fastmarkets.
However, he did not expect the kind of spike in lumber prices noted earlier this year, when there was a pileup of homes to be built and a shortage of construction supplies, while supply constraints eased.
“The market has finally transitioned to a more balanced state compared with being severely oversupplied in the summer months, which ultimately drove the massive correction in prices from record-high levels set in May,” Jalbert explained.