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.
Lumber prices should be supported by the fact that the ongoing working-from-home trend is still encouraging people to move house, Robert Minter said.
"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.
Lumber futures have jumped in recent days on mounting concerns that wildfires in Canada and the Western US will snarl production and supply chains.
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.
"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.
Stinson Dean expects lumber to trade above $1000 for potentially the next three to five years. The historical average is around $400, he said.
The price of a formerly cheap plywood substitute call oriented strand board has surged 97% since the start of the year.
Lumber prices are now trading nearly 50% below their May 10 peak of $1,711 per thousand board feet.