October 2022
Lumber futures, a precursor of lumber prices, fell sharply in late September – the second time this year, with lumber futures closing at $410.90 per thousand board feet, which is about where it was before the pandemic. A board foot is one inch thick, one foot wide and one foot long.
Also in September, wood-pricing service company Random Lengths reported that its framing-lumber composite index, which tracks cash sales, fell to $529, down more than 60% since March.
While that should be really good news for consumers doing building projects or having contractors like SCC building something for them, local wood pricing hasn’t come down at all and likely because higher transportation costs and inflation, including where the lumber is milled, are higher. For example, we recently purchased decking redwood for a fire pit bench we’re building for a customer (remember Outdoor Living Spaces is one of our specialties) and a 2×6, 20-foot board of good-quality redwood cost $80 including the tax. We purchased the wood from one of the local and most prominent lumber yards.
That’s not cheap, and it’s more or less what it would have cost a year ago.
Customers may soon begin to see real price reductions in material packages for remodels and new home construction soon, however. With the Federal Reserve countering high inflation with consistent interest rate increases, the cost of money is higher, home buyers face higher mortgages and fewer building permits are being pulled as a result of all this.
Nationwide building permits for new housing plunged 10% in August compared with a year earlier, and that followed a July decline of 14.4% from the same month in 2021.