Since the COVID-19 pandemic began, multifamily developers and builders have had their work cut out for them as they try to budget for their lumber needs. After months of wild fluctuations, lumber futures fell to their lowest level in a year earlier this month, according to lumber price data from NASDAQ. They have since reversed course, and currently stand at just under $600. — Multifamily Dive
As reported by Multifamily Dive, two pandemic-induced bubbles, in which lumber futures rose to record highs in the thousands of dollars, popped, dropping to below $500. The producer price index, a measure of the average changes in prices received by producers, for softwood lumber fell 22.6% in June of this year and 35% overall between March and July 2022. Measured by the U.S. Bureau of Statistics, prices for the material have never exhibited more than 10% volatility in a given month until early 2020, when lumber costs jumped 20%. Since then, the price volatility for lumber, at its higher points, has ranged from 25% to 30%.
It is believed that one of the reasons behind these recent decreased lumber prices is the impact of inflation on industries that depend on lumber. Specifically, the housing industry has been hit by higher interest rates and costs, which has affected the demand for lumber.
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