As Lumber Prices Sink, Home Depot COO Says Supply and Demand ‘Worked as Expected’

Stack of 2x4's at a home improvement warehouse.
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With lumber prices going into free fall lately after soaring to record highs just a few months ago, at least one prominent American business executive has a simple explanation: It’s all a matter of supply and demand.

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That’s how Home Depot COO Ted Decker explained the wild price swings that have hit lumber since the spring. In a conversation with Fox Business last week, Decker said demand for lumber has finally returned to normal as prices of the commodity have retreated.

Home Depot and Lowe’s saw a slowdown in sales of lumber to do-it-yourself customers when prices were spiking earlier this year. Now that prices have come down, unit sales have improved.

“Supply and demand dynamics worked as expected,” Decker told Fox Business.

One thing is for sure: lumber has been on a crazy ride of late. On Friday, the price of framing lumber fell to $399 per thousand board feet, according to data provided to Fortune by Fastmarkets Random Lengths, an industry trade publication. That marked the 11th straight week that the price of lumber went down.

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Since hitting an all-time high of $1,515 on May 28, the cash market lumber price has sunk 74%, Fortune reported. Not only has the slump erased all of the market’s 2021 gains, it also has sent prices all the way back to 2018 levels.

As previously reported on GOBankingRates, as of last week the price of lumber had increased a staggering 377% in only one year. A boom in home renovations, combined with an increase in disposable income stemming from the coronavirus pandemic, caused prolonged shutdowns that contributed to the rise in lumber prices.

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Higher prices of lumber and other building materials even contributed to a slowdown in homebuilding last month, Fox Business reported in a separate article. Housing starts fell 7% in July to a seasonally adjusted annualized rate of 1.534 million, the Commerce Department reported last Wednesday. That was below analyst expectations of 1.6 million starts.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte MagazineStreet & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, will be published in 2021 by Atmosphere Press.

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