After climbing to historic heights this spring, lumber prices are headed back down—fast. Last week the cash price per thousand board feet of lumber fell $211 to $1,113, according to industry trade publication Random Lengths. That’s down 27% from its $1,515 all-time high on May 28.

The lumber bubble burst. Here’s what comes next

After climbing to historic heights this spring, lumber prices are headed back down—fast. Last week the cash price per thousand board feet of lumber fell $211 to $1,113, according to industry trade publication Random Lengths. That’s down 27% from its $1,515 all-time high on May 28.

“We are in a free fall,” Andy Goodman, CEO of Sherwood Lumber, told Fortune. In the lumber futures market, prices are down even more—dropping 47% since going above $1,700 on May 10.

Why are lumber prices finally correcting? The exorbitant price of lumberfinally has some homebuilders and DIYers backing off. New home construction in May is down 8.8% from the 14-year high set in March. While home improvement sales are down 8.1% since setting an all-time high in March. Incentivized by record-high prices, sawmills and loggers rushed to tick up production. Of course, rising supply and falling demand is a perfect recipe for a price correction.

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