Even if lumber prices normalize around $500, that's still well above the pre-pandemic average.
"We're out of the panic buying. We're out of the massive industry shortages. We're out of the extremes," said Mace McCain of Frost Investment Advisors.
Ed Egilinsky of Direxion pointed to the tightening labor market, the raging wildfires, and the emerging delta variant as possible factors that will push lumber prices higher.
"The losses we are seeing over recent months could soon enough bring another major buying opportunity for the bulls to come back into dominance," Joshua Mahony of IG said.
As the price of lumber stabilizes, more volatility lies ahead, and three factors will keep the red-hot commodity in high demand.
Lumber prices will be volatile, but movements will vary by location in the US, according to Stuart Katz, CIO at Robert Stephens.
Commercial construction may be fueling demand this time around as the US economy makes its way to a full recovery, an analyst said.
Experts told Insider that the price of lumber could go down to $600 per thousand board feet in the next six months.
"I would not be surprised at all if we see the price continue to trail lower than $600 or below toward the year-end," Mace McCain of Frost Investment Advisors told Insider.
Lumber prices are now trading nearly 50% below their May 10 peak of $1,711 per thousand board feet.
Earlier this month, about $60,000 worth of lumber was stolen in Canada when thieves drove off with a trailer fully stocked with lumber.
Lumber futures fell to roughly $1,200 per thousand board feet on Wednesday continuing an 8-day rout for the commodity.
Lumber is hugely expensive right now and that's bad because you need lumber to build new houses. America's in a homebuying frenzy and needs to build.