Hiranmayi Srinivasan covers all things personal finance for Real Simple, Health, Parents, and Better Homes & Gardens. She strives to create inclusive content that encourages financial literacy and empowerment. Hiranmayi is a graduate of Loyola Marymount University and has experience working in broadcast and digital news. When she’s not drinking coffee and writing an article, you can find Hiranmayi binge-watching a TV show, enjoying the California sunshine, or listening to Beyoncé.

A few short months ago, lumber prices were skyrocketing at about $1,500 per 1,000 square feet. Now, the numbers have dramatically dropped, with a 1,000 square foot of lumber coming in at $500, according to the latest numbers from NASDAQ. An increase in supply and lumber yards slowly returning to normal operations is likely to have caused the decrease in price. While the price is still not at its pre-pandemic level, the change is still significant and gives homeowners an opportunity to do remodeling or home improvement projects before fall.

"For the first time in months, we're seeing a 30 to 50% price reduction for all types of lumber, including engineered (e.g., oriented strand board or CDX plywood) and dimensional (e.g. 2x4, 2x6, etc.) lumber," says Michael DiMartino, senior vice president of installations at exterior remodeling company Power Home Remodeling. DiMartino says the material has been in high demand, with 1/2" plywood and 1/2" oriented strand board (OSB) out of stock at home improvement stores because of the newly reduced prices.

While the prices have come down, it's hard to say what will happen in the coming months—especially with COVID-19 cases rising again. Read on to find out how you can take advantage of low lumber prices while they last.

If you have any home improvement ideas that you decided to wait on because of the cost of materials, now is the time to do them. "I have clients who had been holding off on projects including pergolas and deck renovations—now they are back on track," says Barbara Zorn, a realtor with Better Homes and Gardens Real Estate. It's still summer, so it's a good idea to get those home projects (especially any outdoor ones) done while the weather is still warm.

"Adding shelving, plumbing, electrical, heating or cooling to an outdoor building or remodeling a garage to add flex space or guest quarters can be a great return on investment," says Dondy Neuman, sales associate at Better Homes and Gardens Real Estate. Capitalizing on the low lumber prices to make important upgrades to your home will increase its value and give your home some TLC.

Not every project is a DIY—so if you're looking to do major upgrades or are in the middle of one with a contractor, you might want to see if you can re-negotiate the cost of materials. Gregory Kyler, a Chicago-based licensed general contractor, says that he and his team re-priced construction on a new home that ended up being 15% less than it was a month ago.

Kyler advises going through the estimate your contractor gave you carefully, as many contractors still have escalation clauses in place in case lumber prices go up again. You don't want to be stuck having to pay those sky-high (or unexpected) prices; be sure to get several quotes from different contractors, explains Kyler.

If you are planning bigger remodeling projects or additions that require a contractor, do it while lumber prices are low. This way, your contract will be signed with the current lumber price and you get to lock yourself into a good deal, says Jeff Shipwash, owner of Shipwash Properties, LLC a company that buys and flips homes in Knoxville, Tennessee.

If the estimate your contractor gives you is still above your budget, Kyler suggests buying the materials yourself and paying for labor—it's more work for you, but it could help you avoid the 15% markup contractors add for materials.

You could also utilize this drop in lumber prices to improve the structural integrity of your home. "Framing is when you create a structural skeleton of the project during construction," says DiMartino. This type of project requires structurally rated lumber, which means that it is made to hold up against a certain amount of weight and stress.

Similarly, you could reinforce your roof or repair the sheathing. "Sheathing is your roof's underlying layer, and it's typically constructed with CDX plywood or OSB," says DiMartino. Because of the lower cost of lumber, you can hire roofing professionals at a lower rate to replace or reinforce parts of your roof. "By attaching additional pieces of lumber to support split or rotting rafters, the roof can increase its stability and overall load," says DiMartino.

Composite wood and other lumber alternatives are still good options. "Lumber prices may have reduced significantly, but that doesn't mean we should forget the benefits of alternative materials," says Adam Graham, construction industry analyst at Fixr. They can save you money, are more easily available, can last a lot longer, and require less maintenance than traditional lumber.

Kyler says composite is "superior to wood because it's man-made from recycled or engineered materials with less imperfections, like warping, twisting, knots, shrinkage, and cracks," and recommends using it for fences, decks, and exterior trim.

Lumber is also not the most sustainable material and produces a lot of waste. Scott Hamilton Harris, expert designer and builder and co-founder of Building Construction Group, says there are more sustainable materials to use, especially with the fluctuating costs of lumber. "Lumber is sold in pre-cut lengths, and as much as 20" is regularly cut off and tossed in that big bin in front of the project that ends up back in a landfill," says Harris. To avoid this, measure your lumber carefully and only buy what you need. You could also use reclaimed wood for your project.

"With lumber prices soaring and then dropping like the world's fastest and tallest roller coaster, it's left most talking, thinking, and reconsidering their options," says Harris.

While lumber prices are not expected to rise to what they were a few months ago, fluctuations are still possible. With people rushing to stock up on lumber, it could potentially cause the prices to go up again. "If the past 12 months have taught us anything, it's just how volatile the industry can be," says Graham. He adds that other factors such as wildfires and drought could affect production.

The bottom line: Yes, lumber prices have gone back down, and it's good news for those who have been waiting to complete home improvement projects that have been on hold. But it's wise to be aware of price fluctuations and consider alternate materials.

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