Lumber prices may soon start to recede from their recent record highs, and some home builders say they may stop taking new orders or delay projects with that expectation in mind.

Prices for lumber have surged more than 200% over the past 12 months. That has added an estimated $36,000 to the price of an average new single-family home, according to the National Association of Home Builders.

But the sky-high prices may soon back off: Lumber futures have posted slightly weaker numbers over the past month. For example, lumber futures for July delivery dropped more than 5% to $1,158 per thousand board feet. That is down more than 30% from a record of $1,711 that was set on May 10, CNBC reported this week.

So even as prices edge down even slightly, they will still be well above historic averages, Kyle Little, a lumber industry veteran, told CNBC.

“We’re in month number 12 of what we believe to be a 24-to-30-month … cyclical bull wave,” Little told CNBC. “We really believe the new three-year mean will be much, much higher—almost two times than what we’ve seen the previous 20 years.” But a pullback—at least somewhat—in lumber is inevitable as higher prices tame demand, he added.

Some builders are instructing their customers, “If it doesn’t need to be done today, it might be better time to take a breather and start this project later in the fourth quarter, possibly in Q1 of 2022,” Little told CNBC.

Buyers who head into the housing market believing they should get a home for less than the listing price may be very disappointed. Instead, they may consider that asking prices have become more like the start of an auction and be ready to start bidding.

For every listing, there is an average of 5.1 offers, according to the National Association of REALTORS®. What’s more, half of homes are being sold above list price.

Additionally, “Due to the low supply of houses for sale, many homes are now being offered in an auction-like atmosphere in which the highest bidder wins the home,” an article at Keeping Current Matters notes.

In actual auctions, many sellers often set a reserve price, which is the minimum amount a seller will accept. In today’s market frenzy, the list price for a house for sale may be more like that reserve price,, the article says. The asking price has become the starting point of the negotiation in many home sales today.

About 40% of potential buyers who were searching for a home this spring say they haven’t bought yet because they keep getting outbid, according to a survey from the National Association of Home Builders.

Knowing they have the upper hand, sellers have come to expect a bidding war for their home. Twenty-four percent of homeowners recently surveyed say they expect to get more than their asking price, and 29% of sellers plan to ask for more than what they think their home is worth, according to a survey of 657 homeowners conducted by realtor.com®.

Some buyers are going to extremes to win a home they want. Real estate pros report individual listings fetching as many as 20 offers—one even got 97 bids—as the homebuying frenzy continues. To win a bidding war, buyers may be willing to waive contingencies and stretch their budgets to the absolute max. Some buyers have even offered $100,000 above asking price, Debbie Barrera, a broker at Realty Austin in Austin, Texas, told The Wall Street Journal. She even had a buyer offer $500,000 above asking price for a home with a pool.

Builders are building more, even though overall housing inventories still feel tight. Builders in April constructed about 24% more homes than they did in April over the last couple of decades, the National Association of REALTORS® reports. Housing starts are likely to reach 1.6 million for all of 2021 and jump to 1.7 million in 2022, NAR projects.

Building permits are viewed as a gauge of future housing inventory. They provide an estimate of the number of new housing units that the local government has approved to be constructed soon. A single-family home typically takes about 10 to 12 months to build.

In April, 46% of metro areas issued more single-family building permits than the historical average.

NAR researchers analyzed 262 metro areas’ single-family building permit data. The following areas have issued the most and least single-family building permits over the 12 months from May 2020 to April 2021, according to NAR’s Economists’ Outlook blog.

Small-town homeowners say they’re fielding a growing number of inquiries about selling their homes, even though they aren’t for sale. Real estate speculators are approaching them asking if they’d be willing to sell.

Chuck Vukotich told The Wall Street Journal that multiple times a week, he receives queries about his small yellow-brick home in a working-class neighborhood in Penn Hills, Pa., 15 miles from downtown Pittsburgh. His home isn’t for sale and he doesn’t intend to sell. But he estimates he has received more than 100 inquiries on his home, mostly through mailbox fliers that offer all-cash deals and quick closings.

“I don’t mind somebody trying to make a buck, but it’s kind of a pain in the butt,” he told The Wall Street Journal.

Small-town homeowners thought such aggressiveness for listings was reserved for the larger cities. But they’re seeing their home prices bid up in the likes of big cities. The median sales price in Penn Hills, Pa., for example, is up by 19% in April compared to a year earlier.

Real estate investors are reportedly on the hunt in small towns for properties amid short supply and high buyer demand. They’re looking for inexpensive houses that they could possibly flip or rent out, The Wall Street Journal reports.

Nick Schindehette told the Journal that he mails out between 5,000 and 20,000 pink note cards a month to homeowners in 20 ZIP codes. His cards usually read, “Could we possibly discuss making you a cash offer? Either way, please let me know.”

He says a successful response rate for his note cards would be 1%. Most homeowners who accept his offer need to sell their homes quickly. He has done about 50 real estate transactions in areas he targets, which he considers “C+ neighborhoods” where homes are cheaper but could still be leased quickly.

Some investors are being accused of getting homeowners to accept lowball offers for their unlisted homes. Vukotich says he hasn’t entertained any of the offers. His neighbors say they’ve been offered about $50,000 for their homes. An investor model suggests a fixed-up house in his area might go between $115,000 and $120,000.

Office sectors in smaller markets are showing greater resiliency, and companies are taking notice. The only increases in office occupancies in the first quarter were in secondary cities, and even those were modest. These secondary markets are known for having cheaper office rents compared to major markets, the National Association of REALTORS® reports on its Economists’ Outlook blog. The low rents in secondary cities may incentivize more companies to relocate.

Demand in secondary office markets is growing the most in the following sectors:

• Information technology
• Biosciences/medical/health care
• Finance

Though overall office occupancy in the first quarter declined in 84% of the 89 metros that NAR tracks, there were signs of hope regionally.

• West: Office occupancy rose in San Mateo County, San Diego, and Sacramento in California as well as in Tucson, Ariz.
• South: Office occupancy increased in Tulsa, Okla.; suburban Maryland; Fredericksburg, Va.; and Fort Myers-Naples, Fla.
• Northeast: Office occupancy increased in Brooklyn, Buffalo, and Syracuse in New York.

Office rents varied significantly depending on the location. For example, asking rents in San Francisco were $74 per square foot, but in Los Angeles, they were $45 per square foot. In San Diego, office rents fell to $41 per square foot, and in Sacramento, they declined to $25 per square foot, Gay Cororaton, a research economist for NAR, notes on the association’s Economists’ Outlook blog.

Mortgage refinance loans have more than doubled over the past year as homeowners rush to lock in historically low mortgage rates. Lenders refinanced about 2.55 million mortgages in the first quarter of this year, a 113% jump from the same time period in 2020, according to real estate research firm ATTOM Data Solutions.

“Homeowners lined up to refinance their loans in ever-growing numbers during the first quarter of 2021, making for a highly unusual quarterly increase in total lending activity for that time of year,” says Todd Teta, chief product officer at ATTOM Data Solutions. “The home-mortgage industry almost always slows down in winter, but not this year because of so many homeowners hopping on super-low interest rates to reduce their monthly payments. Eventually, the refi side of the lending business will ease up after enough homeowners get in on the good deals.”

But there’s no sign of that happening anytime soon, Teta adds. The metro areas seeing some of the largest upticks in refinance activity are:

• Las Vegas (up 37.2%)
• Milwaukee (up 31.8%)
• Atlanta (up 31.3%)
• Providence, R.I. (up 31.2%)

ATTOM Data Solutions’ Q1 2021 U.S. Residential Property Mortgage Origination Report shows the following top 10 refi mortgage lenders nationwide.

About two-thirds of consumers who bought a larger home in a different city over the last year have the same or lower housing costs than before their move, according to a new Redfin survey. Seventy-eight percent of respondents say they have the same amount of disposable income or more, and 64% say they moved into a home that is the same size or larger than their previous property. Eighty percent say they are happier since they moved.

Many buyers moved to metro areas that offer more affordable housing. More than a quarter of survey respondents say affordability motivated their move; 22% say lower taxes also was a motivating factor. “For most people, relocating to a different metro area probably wasn’t a knee-jerk reaction to the pandemic,” said Taylor Marr, Redfin’s lead economist. “A lot of Americans had already been considering relocating, but they were blocked from actually making the move because they had to stay close to their office or wanted to live near friends or their child’s school.

“The pandemic and resulting work-from-home culture has removed some of those barriers, allowing many people to choose where they live based on factors like affordability, proximity to family, and weather. And the loosening of social ties that come with remote work, remote schooling, and a lack of in-person events made it somewhat easier for families to leave their comfort zone and try somewhere new. Those people are likely to be satisfied with their moves because the circumstances of the pandemic have allowed them to chase their dreams,” said Marrs.

Fewer paint products are hitting store shelves, resulting in shortages that could hamper summer home improvement projects. “Some of the most commonly used paints are out of stock,” Mike Marcewicz, founder of Mike’s Painting and Home Improvements, told Bay News 9 in St. Petersburg, Fla.

COVID-19 restrictions and the February winter storm in Texas—where many of the raw materials used to make most paints are found—have disrupted supply chains for home products. “In a supply chain already challenged by COVID-19, the February natural disaster in Texas further impacted the complex petrochemical network, causing significant disruptions,” a spokesperson for paint company Sherwin-Williams says. “Recovery has been significant in recent weeks and is improving—but is still far from complete. The pace at which capacity comes back online and supply becomes more robust remains uncertain.”

The paint shortages are happening at a time when new construction and remodeling projects are booming. Builders and contractors say they’re on waiting lists to receive more paint for their projects. Customers should expect a run-up in prices on paint until the shortages subside. Paint firms say that price increases could range from 6% to 40%.