by Bill McBride on 10/11/2016 12:01:00 PM
Tuesday, October 11, 2016
Here is another update on framing lumber prices. Early in 2013 lumber prices came close to the housing bubble highs.
The price increases in early 2013 were due to a surge in demand (more housing starts) and supply constraints (framing lumber suppliers were working to bring more capacity online).
Prices didn't increase as much early in 2014 (more supply, smaller "surge" in demand).
In 2015, even with the pickup in U.S. housing starts, prices were down year-over-year. Note: Multifamily starts do not use as much lumber as single family starts, and there was a surge in multi-family starts. This decline in 2015 was also probably related to weakness in China.
Prices in 2016 are now up year-over-year.
Click on graph for larger image in graph gallery.
This graph shows two measures of lumber prices: 1) Framing Lumber from Random Lengths through early October 2016 (via NAHB), and 2) CME framing futures.
Right now Random Lengths prices are up 20% from a year ago, and CME futures are up about 40% year-over-year.