What Drop In Lumber Prices Means For Real Estate Markets
Q: I read that lumber prices have fallen a lot. How will that affect residential real estate? Eric, Little Falls, NJ
A: The Covid-19 pandemic caused lumber prices to skyrocket for a variety of reasons. Higher lumber prices meant that renovations, repairs, and new construction were all significantly more expensive which increased home prices. Wood framing is used to build 9 out of 10 single-family homes in America and the lumber price spike during the pandemic increased the average price of new single family homes by almost $20,000! Luckily, lumber prices recently fell to their pre pandemic levels. Despite the fact that housing activity has cooled this year, demand for housing is still relatively high in much of the country. The good news is that builders will be able to take advantage of lower lumber prices, which will hopefully result in more affordable housing prices moving forward.
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