Lumber prices have dropped more than 20% in March, which marks a significant decline from their near-record highs. But analysts told Fortune that home buyers shouldn’t celebrate quite yet.
Lumber prices still remain up more than 135% since the beginning of 2020. High prices for lumber have contributed to higher new-home prices. The average price of a newly built single-family home has climbed by more than $180,000 since 2020, according to the National Association of Home Builders.
On a recent earnings call, home building giant Lennar said that rising lumber prices have led to about 60% of their year-over-year cost increases. “Further increases are anticipated as lumber futures indicate short-term inflation through the spring cycle or into early summer,” Jon Jaffe, Lennar’s CEO, said.
But even as lumber prices come down, for now, builders say rising gas prices could elevate costs.
“Our fuel costs, the cost just to ship these logs and lumber across the country and across the state, have gone up and it hurts,” Theron Gibbs, a lumber buyer, told WCHS, the ABC/Fox affiliate in West Virginia.