Here we go again: Lumber prices shoot up 40%

For the seventh consecutive week, lumber prices are up.

Since bottoming out at $389 per thousand board feet in August, framing lumber is up 40% to $545. While that “cash” market price is still well below the lumber bubble’s peak of $1,515 in May, it does put lumber prices back in the expensive territory: Prior to the pandemic, the price usually swung between $350 to $500.

But there’s worse news for homebuilders and do-it-yourselfers: This upswing might just be the early innings of another run.

“We expect prices to climb back into the $700s as demand continues [to return],” Scott Reaves, director of forest operations at Domain Timber Advisors, tells Fortune. Wall Street is even more bullish: As of Friday, the futures price for delivery of a thousand board feet in November is up to $772. If the cash market reaches that level, it would mark a 98% uptick from the August bottom.

Why are lumber prices rising again?

Simple economics popped the lumber bubble: Once wood prices got up 300% above their pre-pandemic levels, buyers refused to buy. But as prices started to plummet this summer, buyers didn’t rush back in. After all, why would they when outlets like Fortune said the correction would continue? However, once prices bottomed out this summer, buyers finally returned. That pent-up demand coming back into the market, Reaves says, is helping to drive up the price.

But that’s not the only reason. On the supply side, things quickly went from a historic lumber shortage to a supply glut this summer once buyers backed off. Of course, getting back into tighter supply levels is in the best financial interest of sawmills. (At the height of the lumber bubble, combined profits of the five largest publicly traded lumber producers were up over 2,000%.) That’s exactly what has happened: In the face of a supply glut, coupled with a bad wildfire season in the U.S. Pacific Northwest and British Columbia, many sawmills have curtailed production in recent months. This tighter level of supply is also helping to put upward pressure on prices.

While industry insiders don’t foresee another spring 2021–type lumber run, they do tell Fortune this recent jump could continue into 2022.

“We expect the demand for lumber to continue increasing through 2022 and beyond in response to demographically driven housing needs, which will bode well for not only lumber mills but forestland owners,” Reaves says.

Big takeaway: If these outlooks are right, do-it-yourselfers might want to go ahead and start scoping out their wood for 2022 projects.