Lumber prices just dropped for a 9th straight week amid slowing DIY spending

• Lumber prices notch their ninth consecutive weekly loss after a brief resurgence earlier in the week.
• The price of the key building material has slid about 60% from its peak in early May.
• A shift in spending away from DIY home projects is impacting the market, says Bank of America.

Prices for lumber suffered another weekly loss and descended to levels not seen in roughly six months as the market contends with signs of softening demand and easing shortages.

Lumber prices on Friday fell about 4% to trade at $689 per thousand board feet. That move brought lumber below $700 for the first time since mid-January. Lumber during the holiday-shortened week had pushed higher, stoking the possibility of finding relief. But the advances proved short-lived, leading to the material notching its ninth consecutive weekly loss.

Prices have tumbled by roughly 60% since their peak of $1,670 per thousand board feet on May 7.

One potential factor in pushing lumber lower is consumers allocating funds to businesses such as those specializing in hospitality and travel as more Americans get vaccinated against COVID-19. About 48% of the population has been fully vaccinated, according to the Centers for Disease Control and Prevention.

"Our recent research … suggests a combination of high housing and wood product prices and the shift of expenditures to services in the reopening (from do-it-yourself [DIY] home projects) has negatively impacted new and repair/remodel construction expenditures," wrote Bank of America analysts on Friday.

Meanwhile, dealers and builders are likely decelerating purchases leading up to a slowdown in construction that's typical in summer months, they said. "This is especially true given long lead times - the concern being that today's order of lumber shows up at the beginning of August just as prices move down at an even stronger pace."

Signs of easing in lumber shortages have also fostered the pullback in prices. Sawmills have reportedly ramped up output after the pandemic prompted producers to stop work.

Lumber prices leapt to nearly $1,700 this year in part on a surge in demand for the building material as people stuck at home by the pandemic took up home improvement projects.