Lumber Prices Limit Prospects for New Home Builders

By
Mortgage and Lending with The Federal Savings Bank/Lending in 50 states NMLS # 109616

 

Inflation data for January was inline with estimates though pockets of prices have surged. For instance, lumber prices have soared over the past year which is or will be added the price of a new home. The price for lumber hit $1,000 recently up from $264 on April 2, 2020. The NAHB is urging Congress to call on lumber suppliers to ramp up production. The NAHB said, "Soaring lumber prices are adding thousands of dollars to the cost of a new home, pricing out millions of potential home buyers and impeding the residential construction sector from moving the economy forward."

The $600 stimulus checks that came in late December early January pushed both personal spending and personal incomes up 2.4% and 10%, respectively in January from December. On the inflation front, the Core PCE, the Federal Reserve's favorite inflation gauge, rose 1.5% year over year, unchanged from December. The monthly Core PCE rose 0.3% also unchanged from the prior month. The Federal Reserve has set its inflation target at 2% or above but the gauge has been trending below that level for quite some time.

Rounding out this week's economic data was the Chicago PMI falling to 59.5 in February from 63.8 in January. A reading above 50 indicates expansion of the manufacturing sector; a reading below indicates contraction. The data showed a gain in the employment component. Consumer Sentiment was inched lower in February to 76.8 from 79 in January as the decline in the index was due to future economic prospects among households with incomes below 75,000.

 

Lumber prices surge. Inflation tame, for now. Consumer Sentiment slips.

 

The price for lumber hit $1,000 recently up from $264 on April 2, 2020. On the inflation front, the Core PCE, the Federal Reserve's favorite inflation gauge, rose 1.5% year over year, unchanged from December. Consumer Sentiment was inched lower in February to 76.8 from 79 in January as the decline in the index was due to future economic prospects among households with incomes below 75,000.

Comments (1)

Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

We just built a new deck & the price of lumber was a real wake-up call. We had to revise our plans to stay within budget.

Feb 27, 2021 01:48 PM

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