Wood you look at that! Lumber prices drop in Tennessee

Tennessee

Unfortunately, homebuyers won't see a dip in prices for quite some time.

NASHVILLE, Tenn. (WKRN) – A sigh of relief was heard as lumber prices dropped.

It comes after they skyrocketed more than 300 percent since April of 2020, increasing the price of a new single-family home by more than $30,000 according to the National Association of Home Builders.

Despite the decrease, experts say the American lumber crisis continues.

“This is very intense in Middle Tennessee and Nashville market particularly because the housing demand is so high right now,” Charles Schneider said with the Home Builders Association of Tennessee. “When you cut the output of lumber 40% a year ago and demand goes up, we’re still working our way out of that problem.”

That problem has turned plural, impacting both the price of homes and the pace their built.

Many in the industry are saying “enough is enough!”

“I think a lot of builders and buyers just said it got too high and they stopped buying,” David McGowan, President of Regent Homes said.

The price of U.S lumber futures peaked in late May at around $1,700 per-thousand-board-feet, recently dropping about 40% to just below $1,000 per-thousand-board-feet.

“The price has gone down from what it was three weeks ago but its still 300% higher than two years ago,” Schneider said.

It signals that we still have a ways to go and homebuyers won’t see a dip in prices for quite some time.

“I think it’ll be 18 months before any kind of significant decrease in supply increase in supply happens to reduce the price of housing,” McGowan said.

Why is that? Because even though lumber prices are dropping, the perfect storm continues to spin.

“Even has lumber prices are going down fuel prices are going up .. lumber doesn’t show up magically to the job site.. we don’t have enough truck drivers either,” Schneider said.

While builders are doing their best to deal with the issue, the cost of building materials continues to challenge their efforts, as there are major supply chain problems.

“It’s not just lumber, its windows ,doors, paint everything is in short supply,” McGowan said.

Graphic from NAHB 

“Make sure you understand what the timelines are going to be,” Schneider said. “Just because you order it today doesn’t mean its arriving within the next week especially if you’re looking for something special.”

The NAHB says shortages of materials are now more widespread than at any at any time since they started tracking the issue on a regular basis in the 1990s.

Schneider said to pack your patience as delays could continue for some time.

“You still have a long ways to go before lumber comes back to normal,” McGowan said.

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