How Recent Changing Lumber Prices are Affecting the Housing Market
In recent months, lumber prices both soared to levels not seen since 2006 and dropped back down to pre-COVID prices. The fluctuation upward had a direct impact on the housing market, causing home prices to reach new highs. Conventional analyst expectation held that housing prices would fall again when lumber prices dropped. However, once the issues of lumber supply and demand subsided, housing manufacturers seeking to collect higher profit margins on the homes they build have not subsequently lowered the prices for new construction. This may be, in part, to make up for the large hit construction took to both top line and bottom line growth during the pandemic, and is also likely driven by uncertainty regarding future price volatility in the lumber market.
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- Anthony Winkels is Managing Partner and Wealth Advisor at Fortis Wealth Management
