The price of lumber has come to symbolize our wild ride with inflation and supply chain problems over the past year or so.
Lumber prices are falling again, thanks to a big rejigger on both sides of the supply-and-demand equation.The industry adjusted to the post-pandemic economy — just as rising mortgage rates are slightly easing demand for new housing.
On the supply side: The lumber industry "figured it out," Stinson Dean, CEO of Deacon Lumber in Kansas City, Mo., tells Axios. They increased staffing, he said, and "trucking is loosening up, rail — which has been terrible all year — is just starting to ease, and production is increasing in the U.S. South every quarter."
On the demand side: 54% of home builders said higher mortgage rates are impacting their business, in a survey published by John Burns Real Estate Consulting this week. Some said buyers are rushing to lock in rates before they go higher; however, others pointed to declining foot traffic to new homes. So far, higher rates haven't led to more contracts getting canceledLumber prices spiked to record highs in the first half of 2021 because of supply chain snarls. When they started to come down that June, Fed chair Jerome Powell said it was a sign that high inflation would soon "start to abate," along with supply chain woes.
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