Lumber futures prices for May delivery fell to $278.50 per 1,000 board feet Tuesday on the Chicago Mercantile Exchange, the center for such trading.

              That is down 41% from a recent high of $468.30 reached on Feb. 20.

              Why do we care?

              It means new home construction is shrinking.  Lumber mills are having problems getting lumber sold at higher prices. 

              In essence, the market is pricing in a lost spring.  Traditionally, that is the busiest time for home building.

              Two results follow:  First, home sales for the next two years will have higher percentages of existing homes, compared to new construction, than usual.  That’s good for home inspectors.  New homes get less home inspections than existing homes.

              Second, it already is a seller’s market, especially in the home inspection price bracket (under $500,000 homes).  A seller’s market is when there is less inventory than usual so buyers have few choices.  The usual supply of inventory is about 6 months worth.  Right now, it is closer to 2.3 months worth.

              That shortage will increase all spring and summer, as new construction slows to a trickle.

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