Lumber futures prices dropping after reaching record highs
ROCHESTER, N.Y. (WHEC) — We have some good news for those of you planning renovations. Lumber futures prices dropped drastically last month, and experts say since there’s been an ease on demand, the supply of lumber has grown.
News10NBC found out when we’ll start to see some savings.
Just a few months ago we reported on the skyrocketing cost of lumber, and what it meant for the home building industry. Now we’re seeing a 56% downturn since an all-time price peak, set back on May 7.
Rochester Home Builder’s Association CEO Rick Herman says as these futures prices drop, it’ll take a little time before you see that big of a change.
"So that will start hitting the lumber yards, the distributors, the retailers over the next 60 to 90 days, and consumers should see pricing coming down little by little," Herman said.
News10NBC asked him why it took so long.
"They buy lumber anywhere from 60 to 90-days in advance as well as many builders do, and there for a while builders were guaranteeing prices, seeing that prices were going up so they guaranteed at a higher price," Herman said. "Everything is seeing delays right now due to the lack of workers in the plants, and the slow-downs during COVID."
Before the drop, lumber futures prices were at an all-time high of $1,670.50 per thousand board feet. Last week the same exact thousand board feet was listed at about $741. Herman offered this example if you were building a deck at your home.
"That deck that might have cost $1,200 last year would’ve cost maybe $4,000 this year, and maybe when pricing comes down it will be around $2,000, or a little over," Herman said.
As far as new home buyers, and sellers, both will benefit from the price drop.
"So sure they’re getting more for their existing homes, but at the same time, they got to pay more for lumber," Herman said. "So you’ll be seeing that come down over the next few months."
According to the National Association of Home Builders, the spike in lumber prices alone caused the cost of a new single-family home to rise by about $36,000.