home depot construction renovation
Scott Olson/Getty Images

Lumber prices fell as much as 6% on Monday to briefly trade below $1,000 per thousand board feet for the first time since late March.

Lumber has been the talk of the commodities markets in recent months after surging prices caused issues for homebuilders and renovators. Now, prices are down for the an eighth straight day and are trading roughly 40% below their May 10 peak of $1,711 per thousand board feet.

Over the past year, however, lumber is still up over 175%.

Part of the reason for lumber's recent skid is expanding supply. US lumber production has jumped 5% over the past 12 months with another increase of 5% on the way, according to Domain Timber Advisors LLC, a subsidiary of Domain Capital Group, per Bloomberg.

Despite the reprieve from lumber's rise, shortages of the vital commodity continue to affect builders and renovators. The president of the Hawaii Lumber Products Association told Honolulu's KHON2 that lead times for lumber have more than doubled in the state while prices soar, causing serious building delays.

Oregon's KGW8 reported that wildfire victims in Marion County are struggling to rebuild their homes with insurance payouts due to elevated lumber prices. Also, perhaps due to persistent media coverage, thieves are continuing to target lumber yards looking to make a quick buck on the inflated commodity.

Thankfully, "'nosebleed' prices won't last," according to BMO analyst Mark Wilde. Wilde told clients in a note to expect a near-term pullback in prices in a positive sign for builders.

The analyst did note that lumber costs will remain "above-trend" for the next 1 to 2 years, however, due to "strong demand, a limited supply response, and a rising cost curve," Bloomberg reported.

Wilde's point is backed up by Fastmarkets RISI experts who gave six reasons why lumber prices will remain elevated moving forward in a May report.

Lumber industry veteran Kyle Little also believes lumber's price will fall mildly in the near term but remain elevated from historic norms.

In an interview with CNBC last Tuesday, Little said he sees some "relief over the next six to 12 months" for the industry but noted that prices will still be "much higher" than builders have experienced in the past.

"We're in month number 12 of what we believe to be a 24-to-30-month ... cyclical bull wave," Little said.

"We really believe the new three-year mean will be much, much higher - almost two times [higher] than what we've seen the previous 20 years," he added.

Read more: 'If lumber crashes, stocks might be next': An award-winning portfolio manager who's tracked lumber prices for years breaks down why futures hitting a record high of $1,600 is an ominous sign - and shares what investors can do ahead of the eventual crash

Read the original article on Business Insider