Timber May Soon Follow Lumber In Upward Price Trend inman.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from inman.com Daily Mail and Mail on Sunday newspapers.
America is in a lumber frenzy, and it s not abating anytime soon.
Even though prices fell for six straight days in mid-May, Markets Insider s Will Daniel reported they were still up more than 85% year-to-date and 280% in the last 12 months.
The lumber industry is struggling to ramp up supply as exploding demand is clashing with limited production, resulting in high price tags and an overall shortage.
The thing is, you need lumber to build new houses, and Americans really want new houses right now. The number of homes for sale has never been this low, and new builds are a way to supply houses for everyone who wants them and a lot of people do.
Higher lumber costs are likely behind a drop in January housing starts. Starts of single-family homes, which are the most desperately needed, fell 12% from December, according to the U.S. Census. Builders report concerns over increasing lumber and other construction costs and delays in obtaining building materials, wrote Robert Dietz, chief economist at the National Association of Home Builders. Rising interest rates will also erode housing affordability in 2021, as inventories of existing homes remain low.
Dietz also noted that the number of single-family homes permitted but not started jumped 9.6% in December and was 28% higher than a year earlier, as building material cost increases and delays slow some home building.
Lumber buyers pay up or run out amid U.S. homebuilding surge
Marcy Nicholson, Bloomberg News VIDEO SIGN OUT
With U.S. lumber prices at fresh record highs, construction companies and wood wholesalers are buying just enough to get by, threatening to make price swings even bigger.
Lumber futures in Chicago reached a record US$855.10 per 1,000 board feet on Tuesday, having surged more than 30 per cent since Jan. 12. This price surge during what is typically a winter lull has surprised the industry, raising homebuilding costs and forcing many buyers to purchase only their immediate needs. That may filter through to housing prices, while also boosting earnings at lumber companies such as Weyerhaeuser Co. and West Fraser Timber Co.
Lumber Buyers Pay Up or Run Out Amid US Homebuilding Surge newsmax.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from newsmax.com Daily Mail and Mail on Sunday newspapers.