- Futures fell by 41%.
- "The rapid decline suggests a bubble that has burst".
Source: Wall Street Journal
- Before the fall, lumber prices went from ~$250/1K feet to ~$1,700.
- Causes:
- Longhorn Beetle decimated nearly a decade's worth of Canadian Lumber, a major supplier for the US market.
- 2017-2018 wildfires.
- The Mortgage-backed Securities Crash of 2008 led to a 49% decrease in lumber demand and the subsequent closure of 30+ large sawmills.
- Stimulus cash, low-interest rates, and the shift to work-at-home caused a surge in home improvement and renovations.
- Builders and Supply Depots hoarding wood stock (Source: WSJ)
- Results:
- +$36K on the average single-family home.
- +$13K on the average multifamily unit, $119/month in rent.
- Causes:
Source: National Association of Home Builders, the Hustle, NASDAQ