"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.
"A better-than-expected demand outlook would prompt an inventory rebuild and could spark a large move in pricing," BofA 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.
By end of August and into September, the price of lumber could settle in a range between $350-$450 per thousand board feet, an analyst told Insider.
Lumber prices have slumped roughly 60% from their peak earlier this year.
Commercial construction may be fueling demand this time around as the US economy makes its way to a full recovery, an analyst said.
Lumber is an example of supply catching up with demand and inflationary pressures cooling, Bank of England Governor Andrew Bailey said.
Experts told Insider that the price of lumber could go down to $600 per thousand board feet in the next six months.
Stinson Dean expects lumber to trade above $1000 for potentially the next three to five years. The historical average is around $400, he said.
Lumber prices are now trading nearly 50% below their May 10 peak of $1,711 per thousand board feet.
Lumber future avoided their 10th straight down day on Tuesday recovering from as low as $944 per thousand board feet.
Lumber prices are now down roughly 40% from their May 7 peak, but are still up over 175% over the past year.
After a blistering rally, lumber prices have now fallen approximately 37% from May 7 record highs of $1,670.50 per thousand board feet.
Lumber prices avoided a seventh straight day of losses after spiking positive right before 3:30 pm ET.