Why are lumber prices so high this year?

It's been a roller-coaster ride for lumber prices over the last year – and it's drawn outsize attention from the aisles of Home Depot to the Federal Reserve. Lumber prices surged to record highs this year on the back of booming demand from homebuilders and do-it-yourselfers with plenty of time on their hands.

How much do lumber futures cost?

Still the current price level is historically high. Since the 1990s, lumber futures have mostly traded between $200 to $400 per thousand board feet, with the exception of 2018 when they shot above $600.

Will lumber production catch up with demand?

The good news is that industry executives expect lumber production to catch up with demand – eventually. Samuel Burman, an assistant commodities economist, predicted in a recent note to clients that there will be a “sharp fall” in lumber prices over the next 18 months.

Are lumber prices undergoing a 'paradigm shift'?

Lumber prices are undergoing a “paradigm shift” and are in the process of determining a new and much higher average price level as a result,” Kuta said. “I think lumber futures prices will continue to see severe, two-sided volatility vacillating in a more extreme price range of $550 to $1,200 for the remainder of 2021,” Kuta said in an email.