The lumber bubble initially anticipated in 2021 has popped as lumber prices and lumber futures dropped by over 40% in June, suffering its worst record since 1978.
- The building commodity market has declined by more than 18%, leading to the first negative half performance since 2015.
- On May 7, the lumber prices recorded their all-time high price of $1,670.50 per 1,000 board feet, which is six times higher than their pandemic low recorded in April 2020.
- The reversal in lumber’s performance was triggered by an increased number of Americans going on vacations rather than investing in renovation and building projects.
- Early in 2021, lumber prices soared because of a mix of reduced supply and surging demand for new and improved homes.
A 6.9% decline in mortgage demand recorded in the past week was an indicator of the contracting housing boom.
DJI gains +0.17%