Lumber Prices:

• Lumber prices have already dropped 66%, from a high of $1,160 per thousand board feet to $400.
• This sharp decline is considered a "crash" compared to previous highs.
• Analysts predict that lumber prices are unlikely to rise dramatically in the near future.

Factors Contributing to the Decline:

• Rising mortgage rates have slowed home sales, leading to reduced demand for new homes.
• Builders are less inclined to construct new homes due to the slowdown in sales.

Mill Curtailed Production:

• Lumber mills are curtailing their output as production at the current price point is not profitable.
• Some curtailments may become permanent, with equipment becoming outdated and employees seeking other jobs.

Future Price Spike:

• If demand for lumber increases in the next few years (2023-2025), there could be a price spike due to capacity constraints.
• This is because the lumber industry may not have the necessary production capacity to meet a sudden rise in demand.

Market Demand:

• There is still a significant demand for homes, with a shortage of 5 million homes in the current market.
• The question remains whether consumers will return to buying homes in the next two to three years.