Lumber futures dropped to the lowest level in nearly a year Friday, indicating weaker homebuilding demand and a glut of wood on the market.

Futures have fluctuated wildly, reaching a three-year high at the beginning of August before plummeting 23%, ending last week at $535 per thousand board feet, The Wall Street Journal reported.

The pricing rollercoaster has been ongoing, but it accelerated in recent months as tariffs have taken hold.

During the onset of the Covid-19 pandemic, two-by-four prices nearly tripled as homebuilders rushed to expand their portfolio, restaurateurs crafted outdoor seating areas and lockdown orders caused a DIY boom.

Before the pandemic, lumber rarely traded above $450. In July 2020, futures were at $499 per thousand board feet, the WSJ reported at the time.

Lumber became one of the hottest commodities — before prices retreated to prepandemic levels when the Federal Reserve raised interest rates. A homebuilding slump further lowered demand.

Then, President Donald Trump’s tariffs and investigation into the national security aspects of imported lumber caused consumers to stockpile it. Futures again surged. Canadian lumber fulfills approximately 24% of U.S. demand, according to the WSJ.

Changes in policy have further contributed to volatility in the market. Just a month ago, the price for September deliveries was $695 per thousand board feet, the highest price since summer 2022. November futures were even higher at roughly $710.

As of Monday morning, lumber futures for November are $581.

Today, there is seemingly enough supply, but demand is low. In July, residential building permits were at a seasonally adjusted annual rate of about 1.4 million units, the fewest since June 2020. Similarly, construction spending was down 3.4% from May 2024, when it was at a record high, according to the WSJ.

Construction costs as a whole are expected to rise as fallout from the trade war and immigration crackdown continues to emerge.