Lumber costs have already quadrupled in the past year, with the buzz even reaching TikTok feeds.
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“We’re near the top of a cycle,” given how lumber has skyrocketed with such speed and magnitude, said Joshua Zaret, a senior analyst at Bloomberg Intelligence. “That’s where you start to see this frenzy.”
The pandemic has left Americans with a bigger-than-usual appetite to buy new homes and do renovations, and builders who need wood for spring construction are going to the futures market. They’re the ones pushing prices to new highs, said Brian Leonard, lumber analyst for RCM Alternatives in Chicago.
But there’s still such a thing as too expensive. In Chicago, lumber futures plunged from the record highs on Tuesday because buyers got sticker shock and fled.
“We needed to get to a price where the buying stopped,” said Mike Wisnefski, chief executive of MaterialsXchange in Chicago, a digital marketplace to buy and sell wood products.