The good news for home builders and house hunters is that lumber prices have sold off since hitting an all-time high in mid May. The bad news: wood prices are still up 67% over the past year, adding thousands of dollars to the cost of each new house.
The historic run-up in lumber prices–attributable to a trade dispute with Canada, wildfires and limited rail capacity–comes as U.S. home builders are already struggling to meet demand amid shortages in buildable lots and labor.
Lumber futures at the Chicago Mercantile Exchange closed at $588.80 per 1,000 board feet on Tuesday, down 7.9% from the all-time high of $639 reached May 17 but still sky high in a market in which prices have only occasionally eclipsed $400 over the last three decades.
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