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Big Drop in Lumber Prices

In a world where severe inflation is beginning to seem normal, it’s quite a surprise when the price of any commodity plummets. That’s certainly been the case with lumber, one of the biggest costs of building a new home.

According to Marcus Picton, Copper Island Fine Homes owner and CEO, the commodity price is down to a quarter of it’s recent peak, and the result is a big cost break for anyone considering building a new home in 2023.

“While lumber products vary, I would say at the local timber yard we’re seeing sheet goods such as plywood at approximately a third of their peak price,” says Picton. “The price has been reduced due to higher supply and lowered demand, particularly in the huge US market where housing starts have dropped off significantly. The unprecedented demand during the pandemic drove up the price dramatically. This also drove up production, but now that demand is starting to wane, there’s much more product available, and supply is outpacing demand.”

Picton explains that, for a regular 1,500 square foot family home with main floor, walk out basement and double garage, this has likely dropped the average cost of the lumber package, including the joists, beams and trusses, by approximately $30,000.

“This is the single biggest price drop since the pandemic peaks of January, 2022,” he adds. “The reality of this is that now would be a good time to consider building a house.”

The only caveat? The savings might not last long. Already, the forestry industry is responding to lowered demand and costs by reducing workforces and production. In turn, according to some industry forecasters, the relatively low cost of lumber today might not last long, as lowered production will once again lead to higher prices.