LUMBER PRICES SKYROCKET FULL

23, show the cost of framing lumber near $1,200 per thousand board feet-up nearly 250% since April 2020.Ībout five weeks ago, prices for lumber dropped about 15% but quickly jumped back later, said Hodgson. The price per thousand board feet of lumber normally costs between $200 and $350.Īccording to the latest analysis by Random Lengths, the industry’s tracking firm, the prices as of the week ending Apr. Lumber costs started creeping up last year, though in recent months, they have reached a crescendo. It’s pricing the heck out of people to not be able to afford to buy a house.” “I’d love to tell you it’s going to be over in a week or two, but it’s not unfortunately.

“I’ve been in this industry since ’93, right here in this town, and this talk about lumber-I have never seen something so large increase so much,” Hodgson said. Pricier wood impacted the cost of cabinets, doors and flooring he said. “It’s an increase of that much of the same wood that you used 12 months ago for the house next door.” Nat Hodgson, CEO of the Southern Nevada Home Builders Association, was quoted saying about the survey: In a recent survey in Nevada published by the Las Vegas Review-Journal, new, single-family homes, on average, can cost $25,000 more, and for larger homes, the lumber shortage could cost upward of $50,000 to $60,000 more. For context, lumber has historically fluctuated between $200 to $400.Īcross the United States, the average price for a single home shot up by $35,872, according to an analysis conducted last week by the National Association of Home Builders. In just one year, the price of lumber has increased about 370%-reaching a record high above $1,700 per 1,000 bd ft. Lumber is wood turned into beams and planks and an essential raw material in home building.Ī US lumber shortage has caused prices to more than triple within the last year and added thousands of dollars to the overall cost of new home construction in the country. in order for higher inflation, the record highs in commodities must continue-let’s examine the three aforementioned building materials and see how much more vertically they can go, at least from a technical viewpoint. Given their bets on price pressures, and the beauty of self-fulfilling prophecies-i.e. They are, however, convinced that price pressures will force the Fed to increase interest rates-which have been near zero since the COVID outbreak in March 2020-earlier than it expects and taper the accomodative monetary policy that has juiced stock markets almost throughout the pandemic.

LUMBER PRICES SKYROCKET FULL

This constituency is almost certain that US inflation will be beyond anything projected as the economy makes what will be closest to a full recovery from the pandemic.īut even this group doesn’t believe inflation will average 2% this year. The problem is with economists outside the central bank, specifically those who have the ears of Wall Street traders. A good number of district Fed chiefs, who sit with Powell on the FOMC to decide on monthly interest rates, agree with their chairman.

Powell particularly likes to think that the current inflationary pressures are fleeting, or, to use his favorite word, “transient.” The Fed chair believes that until 2023, there will not be any lasting inflation that will allow the metric to reach 2% for a calendar year. In fact, prior to the 2008/09 financial crisis, there were only four years when US inflation exceeded this target, from 2004 through 2007. Since the Fed announced its 2% target in 2012 for price pressures, the central bank has never achieved the goal for a calendar year. Privately, most monetary policymakers at the Fed, led by Chairman Jerome Powell, are convinced that 2021 will not have the distinction of being a 2% inflation year.

Officially, the Fed’s Federal Open Market Committee (FOMC), has forecast that the Personal Consumption Expenditures rate, a measure of inflation, will average 2.4% in 2021 and 2.1% in 2023. No one really knows what it’s going to be. The Federal Reserve projects that growth through 2021 will be 6.5%. The US economy expanded at an annual rate of 6.4% in the first quarter of this year, after the pandemic-induced contraction of 3.5% for 2020. Price pressures in building materials are just skyrocketing in the United States as an economy rip-roaring in its recovery from COVID-19 sets up an inflationary environment possibly not even seen after the Great Recession of the last decade. Create New Watchlist Create Create a new holdings portfolio Add Create + Add another position Closeįirst it was lumber.

Lumber prices skyrocket