Lumber prices reached record highs in 2021 but have fallen to record lows as higher interest rates led to a drop in U.S. residential construction, providing an opportunity for buyers and home builders alike.
“Now is the perfect time to secure lumber for future upcoming jobs,” said Steve Loebner, vice president for forest products and risk management at Sherwood Lumber. “Lumber, when adjusted for inflation, is at [or] near all-time lows” on many key items, with most of the benchmark commodity lumber items trading around 20% under the cost of production.
The futures market is currently pricing lumber for extended shipping times at numbers that represent “very compelling value,” said Loebner, but lumber mills will “not continue to print huge losses indefinitely and will be forced to further reduce output.”
Looking at the big picture, from a risk versus reward standpoint, “this may be one of the best long-term buying opportunities we have seen in many years,” he said.
