Lumber prices are finally going down after reaching a record high in May.

Projections for July show lumber delivery prices are expected to be about 40% lower than the May record.

After topping out on May 7, prices for lumber then dropped 22% by the end of May, according to the NASDAQ commodities exchange.

The spike was caused by an initial lumber shortage that developed as COVID-19 pandemic restrictions lifted, homebuilding soared and production struggled to keep up.

Experts say the drop is because the record prices were unsustainable and there was "pushback" in the marketplace.

With the dip in lumber prices, the Commerce Department is seeing a slight increase in the number of new housing being built.

According to the National Association of Home Builders, the surge in lumber prices has added around $35,000 to the cost of a new home.

Robin Dich and Alex Livingston contributed to this report