FORT WAYNE, Ind. (WANE) – Good news for future home builders and new buyers. After a spring where the cost of lumber reached astronomical heights, prices appear to finally be on the decline.
“The prices are starting to slowly come down,” said Jamie Lancia, the president of Lancia Homes.
According to Nasdaq, during the lumber price surge’s peak in May, the cost was $1,670.50 per thousand board feet.
“The highest costs I’ve ever seen,” said Matt Lancia, the President of the Home Builders Association of Fort Wayne. “I have three houses that I track consistently. The one home, last March, was about $13,000 for the lumber and this past June, I got my new pricing and it was $40,100.”
As of Wednesday, the price per thousand board feet is $967.90, more than a 40% drop from May.
Part of the reason for the drop can be attributed to mills that shut down during the pandemic are finally having the opportunity to catch up with the demand.
“We also realize it’s a commodity item, and that it’s already starting to go down because of the way that commodity market is being traded,” said Jamie Lancia.
However, Hoosiers likely won’t see those reduced prices locally for a few months. The reason, according to Jamie Lancia, is because this decline has only started in the commodities and hasn’t reached the local marketplace yet.
“So, lumber is typically purchased on future pricing,” said Jamie Lancia. “If they’re buying today with futures pricing today, you won’t take delivery of that product for maybe 45 or 60 days from now. Lumber that was purchased back in April in May when when I was at the peak of the marketplace is now just being delivered and hitting this marketplace here.”
He said he expects the price of lumber to normalize sometime this fall as the commodity markets become more stable and supply chains continue to open up more.
“I don’t believe they’ll come all the way back down to the original maybe $15,000 for maybe a typical average home though,” said Jamie Lanica. “But, I do believe they will come back down to a normal new normal level of some sort. I don’t know what that is going to be exactly yet.”
The prices of windows, doors, tubs, showers and flooring were impacted as well. Jamie Lancia said those prices should also start to “level off” by the fall.