The Expert Podcast

Lumber prices are crashing. Are you seeing this in your market? Put some comments below and let us know what the lumber prices you're seeing are as a contractor.

According to the Wall Street Journal, lumber prices have fallen back to pre-COVID levels. Rising interest rates have taken an ax to one of the pandemic's hottest commodities. Uh, that's a good pun right there. Lumber prices have fallen to the lowest level in more than two years, and it's now at $410 per thousand board feet. This is well below $500, still above what it was in 2017 or 2018 in the threes, but it's pretty far down.

Is this showing up in your area at the retail level? At the contractor level? Are two-by-fours, sheet goods, and millwork coming down in price, and is there availability as well? As a builder, is this affecting your bid quotes and your lumber packages?

One of the problems is that home prices are still high, but nobody's buying them because of interest rates and inflation. However, there may be an opportunity for remodels and additions. Even new construction might be a hedge right now because you could build a new house cheaper and then put it on the market below the price of a resale home that's still priced too high. It'll take a year to turn around a spec house anyways.

So, is this an opportunity for a builder to build a house, assuming you don't have rehab or edition jobs lined up? What are your thoughts? Is this a time to jump in and try to build a house when lumber prices are back down, waiting for the next bump? Or is this the beginning of a longer-term crash?