Lumber futures on Chicago Mercantile Exchange posted their largest-ever weekly loss, extending a multi-week decline as sawmill output increases and buyers hold off on purchases, according to Bloomberg.
On Friday, lumber futures fell 5.61% to $1,059.20 per thousand board feet. For the week, prices plunged 18%, the most significant decline since 1986, one year before the 1987 stock market crash.
Lumber prices have crashed 40% from the record high in May of around $1,711.
Lumber prices have catapulted into the stratosphere in the last year, hitting renovators, home builders, buyers, and anyone else extremely hard. The National Association of Home Builders (NAHB) has noted lumber prices have added at least $36,000 to the costs of a new single-family home.
For the last several months, we have warned about the pernicious effects of soaring prices on consumers. For instance, the University of Michigan economic sentiment survey shows the number of people who say it’s a good time to purchase a house has collapsed as the price of lumber, copper, concrete, roofs, labor, land, and almost everything scream higher. Shown below is the survey matched up against NAHB’s survey (a homebuilder survey that rates market conditions for the sale of new homes) and lumber prices. It’s easy to spot as lumber prices soared, the homebuyer sentiment survey crashed. – READ MORE
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