Lumber Prices Continue To Sink As New Home Construction Slows - InvestingChannel

Lumber Prices Continue To Sink As New Home Construction Slows

Lumber prices have slumped for seven consecutive days as supply chain constraints continue and new home construction in North America slows down.

Lumber futures tumbled to $1,053.70 U.S. per 1,000 board feet on the Chicago Mercantile Exchange yesterday (January 25), heading for its seventh-straight decline. That’s the longest slump since last July.

The pullback in the futures market may signal that soaring costs and transportation bottlenecks will further crimp demand for lumber products.

Wood prices have been volatile since the global pandemic began in 2020. They touched record highs amid a COVID-19 inspired building boom, then collapsed because sawmills ramped up production and high prices stifled demand.

Flooding in British Columbia last fall further disrupted supplies and shipments, and vaccine mandates that now apply to truckers crossing the Canada-U.S. border are adding to transportation issues.

An index of framing composite has more than tripled since late August, adding $20,000 U.S. to the price of an average new home, according to the National Association of Home Builders.

Labor shortages and transportation woes have made it harder to get building supplies, prompting builders to delay or cancel new home construction projects, according to industry groups.

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