Where Are Lumber Prices Headed Next? The Future of Wood in a Shifting Market

The Expert Podcast

🔎 In This Episode:

• Explore the volatile journey of lumber prices over the past five years
• Why psychological price points like $500 and $1000 matter in the market
• Analysis of price spikes and dips since 2020, and how they’ve affected the construction industry
• Learn why we’re unlikely to return to $300–$500 lumber prices again
• How builders and homeowners have adjusted to higher lumber costs
• Insights into investor activity in new home subdivisions and what it signals
• Forecast for a new “normal” lumber price range: $750 to $1100
• The real impact of lumber prices on total home construction costs
• Why final house pricing matters more to buyers than material pricing
• Breakdown of a home’s cost structure: lumber, labor, permits, and land
• How a 20% lumber increase only adds around 7% to the home price
• Why higher costs are being absorbed across all segments (builders, buyers, remodelers)
• Challenges with material availability: fixtures, trim, appliances, copper, and labor
• Scarcity of skilled subcontractors and its impact on construction timelines
• Why price increases of $20k–$100k on projects are being normalized—just like car prices
• Overview of factors keeping lumber prices elevated: diesel, labor, insurance, supply chain
• How lumber yards are struggling with tighter margins and higher inventory costs
• Discussion on why no one—builders, yards, or mills—is truly benefiting from price hikes
• The role of high transportation and operation costs in keeping prices up
• Why building a new home may be a smarter financial choice than buying an existing one

Predictions: new lumber price floor around $600–$700, occasional peaks above $1000
Reminder: inflationary pressures on all inputs mean prices won’t dramatically fall
Final takeaway: get used to the new price landscape—this is the long-term trend