Timber prices will be liquidated when demand decreases. We will see prices fall with better logistics, but due to the logging, the market will never be able to keep up with the increase in demand. Prices will fall as we approach summer, but there will still be a risk of rising again if demand picks up, he said. Home construction providers predict that prices for engineered wood (including wood) will increase by 18% over the next year and construction supplies by 11%.
There have been a huge number of double, triple and quadruple orders. Some builders can afford it and can store supplies in a warehouse for future construction, but others will cancel their orders. Commodity prices rise and fall. That is why they are called commodities and are not included in mini-formulas for calculating inflation.
Nun agrees, adding that a decline in demand or an increase in supply will need to continue for some time before price reductions occur later in the process. As long as demand for new construction remains above average, prices will remain high (or rise). More housing appears to be on the way, as building permits for privately owned housing units also increased 7.7 percent year-over-year, although they fell 1.9 percent from the previous month. After months of struggling to source wood, more than half of U.S.
suppliers of building materials said in March that inventories had returned to pre-pandemic levels, according to Burns's latest construction products survey, which covers about 6% of the market for wood distributors. Speaking from the remodeling side, they don't have to lower their prices to do business, as everyone has bookings for a year or more and keeps finding interested customers. While supplies of building materials are increasing, demand for housing remains high despite mortgage rates reaching 5%. The huge pandemic wood shortage that delayed construction and drove U.S.
home prices to record levels is easing, at least for now. I have a hard time going through those businesses and paying the crazy prices charged for wood products. Prices for wood products tend to fluctuate more than most goods, because housing construction can rise or fall much faster than sawmill capacity. This was one of the few causes that contributed to high wood prices, according to Tim Morris, HomeSmart associate broker and former homebuilder.
Wood prices have started to fall, but it will take a while for the end user to see those savings. Electronics prices have dropped so much that they are finding other ways to get their money, such as printer ink and software subscriptions. Meanwhile, building suppliers are finding alternative shipping routes to avoid supply chain problems, including a shortage of rail cars.