The Expert Podcast

• Despite a cooling real estate market, rising interest rates, and reduced home sales, lumber prices remain high at retail stores.
• Wholesale lumber prices have dropped significantly—from around $1,400 per thousand board feet to about $700—but this isn’t always reflected at your local lumber yard.
• Retailers still hold inventory purchased at higher prices, so current prices reflect those earlier costs.
• Lumber producers (mills) are avoiding flooding the market because demand has dropped; overproduction would cause prices to fall below production costs.
• Many sawmills have scaled back production due to higher-than-usual inventories.
• Experts don’t expect retail lumber prices to return to pre-pandemic lows anytime soon; prices will likely stabilize above 2019 levels.
• The lumber market experienced a classic “bounce” pattern:
  • Oversupply pre-pandemic followed by sudden demand surge due to pandemic home improvements and remodeling.
  • Supply disruptions due to weather events (flooding, fires) in key lumber-producing regions.
  • Builders faced soaring prices as demand outpaced supply, with prices hitting over $1,400 per thousand board feet.
• Currently, demand has normalized; most DIY projects are complete and builders know their project volumes.
• Labor shortages are limiting new home construction, which influences lumber demand and prices.
• Overhead costs for mills, wholesalers, and retailers have increased significantly (payroll, rent, utilities, insurance, trucking), pushing retail prices higher.
• Even with reduced sales volume, companies need to maintain higher profit margins to cover fixed costs.
• Builders and developers still find the market viable at current lumber prices, factoring in higher costs into housing and remodeling budgets.
• Historical lumber prices ranged from $300–$500 per thousand board feet; now prices are expected to stabilize between $750 and $950.
• Lumber prices are unlikely to fall below $500 or spike above $1,000 soon.
• Other building materials (paint, adhesives, fasteners, tools, appliances) have also increased in cost by similar margins.
• For builders, a good rule of thumb is to multiply historical project material and labor costs by about 1.6 (160%) to estimate current costs.
• Labor costs include wage increases plus higher insurance and taxes, contributing to overall price hikes.
• Clients generally accept these increases if properly factored into pricing; underpricing can cause project delays, extra costs, or cutting corners—avoid these pitfalls.
• Your feedback is welcome—share your thoughts or experiences with lumber prices in the comments!