Lumber Futures and Cash Prices Crashing
  • Futures fell by 41%.

  • "The rapid decline suggests a bubble that has burst".

Source: Wall Street Journal

  • Before the fall, lumber prices went from ~$250/1K feet to ~$1,700.

Causes:

Longhorn Beetle decimated nearly a decade's worth of Canadian Lumber, a major supplier for the US market. 2017-2018 wildfires.

The Mortgage-backed Securities Crash of 2008 led to a 49% decrease in lumber demand and the subsequent closure of 30+ large sawmills.

Stimulus cash, low-interest rates, and the shift to work-at-home caused a surge in home improvement and renovations.

Builders and Supply Depots hoarding wood stock (Source: WSJ)

Results:

+$36K on the average single-family home.

+$13K on the average multifamily unit, $119/month in rent.

Source: National Association of Home Builders, the Hustle, NASDAQ


Join Our Newsletter 

Sign up for our newsletter to get the latest news and updates.

Subscribe Now

Construction Employment Down due to Lost Jobs and Cancellations