Lumber and Home Prices

Hi Friends,

Today's market headlines were all about earnings beats (there were some big beats) and shortages - both for Lumber and microprocessing chips.

The lumber shortage is being called poor planning as outsized demand for wood (lots of residential construction) and supply constraints, exacerbated by covid, have made demand increase at a greater rate than supply.

To me, this also signals that home price increases we have been seeing are mostly warranted. Low interest rates make higher home prices affordable, and increasing costs to build make existing homes more valuable.

I have a few friends who sold their houses and started renting because they wanted to cash in on their equity and rebuy something better but wanted to wait for home prices to drop. Many months later, they are priced out of the market they really wanted and now stuck renting as they are unhappy with their options and any houses that come to market get swooped up immediately by all cash buyers - it is ruthless out there.

Has this been your experience as well?

Thanks for coming by,
Brian

Note: image courtesy of pixabay.com