Framing lumber prices fall for a fifth straight week, down 10% in a month

Weekly readings published by Madison's Lumber Reporter and tabulated by Lesprom Network show the slide: $500 for the week ending Oct. 9, $499 on Oct. 16, $495 on Oct. 23, $459 on Oct. 30 and $449 on Nov. 6. Most of the drop came in the week to Oct. 30, when the index lost $36.

According to Lesprom, the index is built from the four species groups in the futures contract (Douglas fir, hem-fir, and Western and Eastern spruce-pine-fir), each weighted by its recent share of North American output. The National Association of Home Builders, which tracks the same index, said the Oct. 30 reading was 4.4% lower than a year earlier.

NAHB says lower mill prices usually take at least a few weeks, and sometimes a couple of months, to show up in what builders pay, and only after prices have fallen for a sustained stretch or leveled off. How fast relief arrives depends on the size of the builder and the supplier and on their relationship, the group says. NAHB says an average new single-family home takes framing lumber totaling about 15,000 board feet, so at the index level the monthly drop is worth roughly $750 a house.