(WJW) – The lumber bubble has started to pop.
After skyrocketing to record highs in May, futures for July delivery dropped more than 40%.
Sherwood Lumber’s Kyle Little says prices had reached unsustainable levels.
The price increased as restaurants created new outdoor spaces and homeowners completed new projects, leading to a shortage and a price hike.
The National Association of Home Builders said the increase was so high, it added about $36,000 to the price of a new home.
Lumber futures traded back below $1,000 per thousand board feet this week for the first time since late March.
Of course, now that prices are falling, people are selling.
“When you have over a 400% price move in about a 15-month period of time, the volatility involved with that will lead to price adjustments like we are experiencing right now,” Little told FOX Business.
Industry leaders say there are still supply chain issues in other areas.