The days of pricey lumber might finally be over.
Lumber futures are toppling to levels not seen since November amid fears of a softening housing market and economic recession. Futures fell as low as $604.50 per 1,000 board feet in Chicago on Wednesday, extending a slump to about 46% this year. The commodity’s collapse is a stark reversal from all-time highs set in 2021 during a pandemic-fueled homebuilding boom.
“Lumber markets are probing for a floor,” said Kevin Mason, managing director of ERA Forest Products Research, noting concerns about collapsing home sales and rising interest rates are pushing prices lower.
Recent comments by JPMorgan Chase & Co.’s Chief Executive Officer Jamie Dimon aren’t helping, Mason said. Earlier on Wednesday, he warned investors to prepare for an economic “hurricane,” given challenges including tightening monetary policy and Russia’s invasion of Ukraine.