Market Update – September 2023

Lumber and panel prices have stalled at trading levels higher than we’d all like them to be, especially OSB. Demand for most products is just enough to allow mills to hold steady on their pricing. Inventory levels at the mills aren’t reaching levels forcing them to adjust downward and there isn’t enough product in the pipeline to create any legitimate competition or a two-tiered market. Buyers at all levels (retail yards, wholesalers, reloads) have been very cautious not to build inventory as most everyone lacks confidence in the market at current levels. Looming threats of hurricanes have also helped to allow producers to stick to their guns. As we head towards what is typically the slower part of the building season, we may see this begin to reverse itself. But then again, not much over the past few years can be classified as “typical.” Building materials too remain at inflated levels with few product lines extending pricing relief to the industry. With all aspects of the building process up, most significantly since 2020, the added pressure on the housing market is showing itself in a big way. Existing and new housing remain close to all-time highs in terms of price while the supply continues to be well short of what is needed. But with the rise in interest rates, many people who’d like to move and upgrade don’t want to leave their current mortgage rate. Thus, the lower priced homes that might be more in the ballpark of first time buyers aren’t coming on the market and it’s tough to get the cost of a new home low enough for those folks to afford. Attitudes might change once most come to terms with what is likely to be the new level of interest rates in the foreseeable future, time will tell. The lowering of material costs would certainly help this situation.