Lumber Price bubble is about to burst
After a strong price increase in spring, the party seems to be over.
Steffen BoehmSeptember 21, 2026
Timber prices have skyrocketed in the past 12 months, driving up the average price for both new and existing single-family homes. Until now. That bubble finally seems to have burst. Mandatory closures caused the sawmills to cease production, while many Americans trapped inside because of the "stay-at-home" orders rushed to the stores to buy wood for projects to kill time. These two related things caused the wood supplies to go down in the basement. As a result, lumber prices have soared more than 300% since April last year, leading the National Association of Homebuilders to report that lumber shortages have increased the cost of a new home by at least $ 36,000. They estimated the cost of wood to build a house is $ 70,000, almost double the cost of building the same house last March. In addition, the average sales price for existing homes rose a record 17% to $ 329,100 - the highest since the National Association of Realtors began recording prices in 1999. However, many experts have predicted the end of the era of wood at the top of commodity prices, and they have now been confirmed. After reaching an all-time high of $ 1,711 per 1,000 board feet in early May, the price of wood is now plummeting rapidly. Over the past week, the price fell about $ 700, down 41%. But even though lumber prices are in free fall, they are still well above the futures prices for lumber last March when they were at $ 303. Two factors triggered the drop in prices. First, with the easing of restrictions across the country, sawmills resumed normal operations, while wood-hungry do-it-yourselfers shifted their money and time to travel and entertainment. However, it could be a few more weeks before the price cuts in home improvement stores take effect. Dustin Jalbert, an analyst for Fastmarkets, told NPR that prices are unlikely to drop to what they were before the pandemic. Similar to wood, prices for new and used cars have risen in the past 12 months as the shortage of microchips has forced many automakers to cut production sharply. With new vehicle inventory down 25% compared to the same time last year, customers have turned to used vehicles, making prices up an average of 30% compared to last year, and 17% since January this year alone Year. However, some predict that the used car industry will soon see its own bubble burst. As used car prices move closer to new car prices, CarMax CEO William Nash believes used car prices will fall later this year. "I think we are approaching this turning point," he said. Overall, the most important consumer prices rose in May by 5% compared to the same month last year, and thus faster than they have been since August 2008, according to the new report by the Ministry of Labor. Food prices rose 2.2% over the 12 month period, while the gasoline index rose 56.2% last year, part of an overall 28.5% increase in the energy index.
