Dozens of raging wildfires in the West are threatening to send lumber prices soaring again.
Lumber prices had been cooling in recent weeks, giving builders—and, ultimately, new-home buyers—hope for more affordability. Remodeling costs also were set to benefit. But the relief may be short-lived, as lumber producers are warning price hikes are on the horizon if the Western wildfires aren’t contained.
Canfor Corp., one of the largest lumber producers in North America, said this week that the company is scaling back output at its mills, The Wall Street Journal reports. “The wildfires burning in western Canada are significantly impacting the supply chain and our ability to transport product to market,” said Stephen Mackie, an executive vice president at Canfor. Other companies also are predicting a large-scale pullback in lumber production because of wildfires burning all along the West Coast.
Stock traders bid up lumber futures this week by the daily maximum amount exchange rules allow, the Journal reports.
Earlier this year, amid crushing buyer demand, lumber prices reached a record high in May. But since then, they've fallen nearly 70%. The median price of a new home in May was up 18% from a year earlier, according to Census Bureau data. At the time, high lumber costs were blamed for soaring new-construction costs.