Rising Lumber Prices and Home Building Surge have Buyers in a Purchase or Do Without Predicament

With lumber prices once again on the rise, construction companies, along with pro dealer lumber yards have reverted back to purchasing hand to mouth – just enough to get by and little more. And it is being made more stressful by extended mill order files and ongoing late shipments. This buying strategy is portending even more volatile price swings ahead for the lumber markets. Prices on the physical market have largely tracked the rallies in futures prices, with some time lag, signaling higher prices are yet to come for buyers. Lumber futures in Chicago reached a record $855.10 per 1,000 board feet on Tuesday (1-26-21) having surged more than 30% since January 12th. In a note on Tuesday Omar Abdelrahman, economist for TD Economics, said lumber prices are expected to “downshift gradually by year-end. Unusual gains in lumber markets are expected to ease as supply continues to respond to the attractive price environment.”