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Lumber prices drop, but home prices remain high

In some cases, lumber prices increased 300-400% over the past several months - the news is prices are going down.

MINNEAPOLIS — Lumber prices are starting to drop after increasing by 300% in some cases.

Tom Siwek who is the owner of Siwek Lumber and Millwork in Northeast Minneapolis says prices have been dropping within the last month.

"A 12x4 stud peaked at $12, it's typically around $3 and now they're about $5 or $6," Siwek said.

Siwek says the surge in prices was primarily with construction lumber.

"What it hasn't really touched the same way is cedar, fencing, hardwood lumber, moldings, doors, those are all a little bit higher than normal, you know, 10 to 50 percent," Siwek said.

Siwek said the price hikes didn't start happening until this past spring when people felt confident going back to work.

The recent drop in price comes as manufacturers go back to work, demand levels out and importing picks up.

Siwek Lumber and Millwork product manager Scott Talbot says he expects lumber prices to reach pre-pandemic levels later this summer.

"We are heading close to getting to levels before the COVID," Talbot said.

While others, like Siwek, say it will take time to rebuild.

"I saw it will be a challenge to get that far down, but I think we're going to someday once things get to normal," Siwek said.

As far as housing prices go, Chris Galler, the CEO of Minnesota Realtors says builders are in a better position but don't expect housing prices to drop.

"They still have significant labor shortages," Galler said. "Although lumber has come down this month, they don't buy lumber necessarily on the day-to-day so they have to also consider a few months out so they got a lot of lumber they paid quite a bit for because they had to have it coming in since last year."

According to new data from Minnesota Realtors, the median home price in Minnesota reach $325,000 in June which is an 18.9% increase from last year.

No matter how you slice it or saw it, it's hard to predict the future especially when it comes to lumber prices.

"The best thing to do is buy when you can and move forward," Talbot said.

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