(Bloomberg) — Lumber is on a tear again, bringing back the specter of increasing construction costs.
Most Read from Bloomberg
The Housing Boom May Be About to Go Bust
The Housing Party Is Starting to Wind Down
Peloton’s Famous Instructors, Who Can Make Upwards of $500,000 a Year, Escape Layoffs
Musk Looks Increasingly Isolated as Automakers Embrace Lidar
Amazon Is Raising Base Salary Cap to $350,000 From $160,000
Lumber futures have recouped recent losses and risen by the exchange maximum of $45 for six consecutive sessions, touching $1,204.90 per 1,000 board feet Wednesday, the highest in three weeks. After prices slumped in January amid cold U.S. weather and transportation bottlenecks, tight inventories ahead of peak building season are helping to fuel a rebound.
“Prices are well above trend pricing, as well as our own price forecasts,” Mark Wilde, an analyst at BMO Capital Markets in New York, said Wednesday in an email. “We are also just heading toward spring construction season and housing market activity, so it wouldn’t surprise me to see prices rally further.”
Wood prices have been volatile since the pandemic began and they touched record highs during a Covid-19 fueled building boom, then collapsed because sawmills ramped up production and high prices stifled demand. An index of framing composite has more than tripled since late August, adding to the cost of an average new home.
Most Read from Bloomberg Businessweek
Voters Fed Up With Covid Are Turning Against Biden and the Democrats
Why Airbus Is Canceling Orders From Qatar Airways, One of Its Best Customers
Why the World Needs China’s Covid-Zero Policy
The Nuclear Industry Argues Regulators Don’t Understand New Small Reactors (Correct)
100 Million Americans Can Legally Bet on the Super Bowl. Sports Will Never Be the Same
©2022 Bloomberg L.P.