Lumber prices are up

Update: 4/19/21

In News by admin

You’re probably aware that Bitcoin has been on an absolute tear lately.  And you may even be aware that the price of lumber has been skyrocketing as well.  But did you know that over the past three months, lumber has risen 124% – nearly three times Bitcoin’s 48% gain!

You’re certainly aware of this if you’re building or buying a house. According to the National Association of Homebuilders, the increase in lumber prices has added a little over $24,000 to the cost of a new single-family home.  In the early stages of Covid, lumber mills shut down constraining supply. While they’re operating again, they still haven’t caught back up. At the same time, to escape Covid, there was an exodus from major cities creating a wave of homebuilding in the suburbs which significantly increased demand for lumber. The combination of the lower supply and higher demand has created a textbook example of skyrocketing prices.

Eventually this will have the effect of cooling off a red-hot housing market that’s been booming since the start of the pandemic last year. In the shorter term, the spike in lumber prices has the potential to lift inflation, something the federal reserve has indicated they’d like to see.  But the stock and bond markets have never been happy with inflation and might decide to voice their own differing opinion.

Sincerely,

Jim, Mark, and Dave

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