Lumber prices fall for a 5th straight day in a reprieve for surging commodity prices
Lumber futuresand spot prices fell for the fifth straight day on Friday.
- Futures are trading around $1400 per thousand board feet while spot prices are hovering around $1550.
- Spot lumber prices are still up roughly 78% since the start of 2021.
The fall brings a reprieve for home builders who have been struggling with surging commodity prices for over a year now.
From corn to copper, a number of
Prices have risen so substantially that the Guardian reported incidents of poachers clearing valuable trees from Western Canadian forests in hopes of making a quick profit.
This Friday, futures dropped to around $1,400 per thousand board feet while spot prices are trading around $1,550.
Lumber stocks, which have been on a bull run since mid-2020, are seeing a mild sell-off as a result.
Read more: 'If lumber crashes, stocks might be next': An award-winning portfolio manager who's tracked lumber prices for years breaks down why futures hitting a record high of $1,600 is an ominous sign - and shares what investors can do ahead of the eventual crash
Falling lumber prices should help relieve some pressure from home builders and renovators who have been unable to keep pace with rising demand due to high costs for raw goods and labor.
According to the National Association of Home Builders, the unprecedented spike in lumber prices has pushed the average price of a new single-family home up nearly $36,000 since April of last year.
Rising commodity prices have led some to fear the potential impact of inflation, but with lumber prices coming back to earth, Fed chair Jerome Powell's comments about "transitory" inflation have gained some support.
A number of economists have said inflation will likely fall back down to around 2% as the year goes on and supply/demand imbalances brought about by the pandemic dissipate.
Inflation, as measured by the Consumer Price Index, rose 4.2% over the last 12 months, April data revealed, the sharpest increase since 2008.
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