Here’s another point in the debate about housing: lumber, obviously a crucial component of new construction, may be foretelling more weakness to come.
The Pragmatic Capitalist notes:
As you can see in the following chart lumber prices have spiked in each of the last three springs/summers despite the worst housing environment in the post-war era.
Despite being 30% off the lows lumber prices have fallen 15% from recent highs as seasonal strength in housing begins to wane. August/September have been vital turning points in housing and lumber prices in each of the last few years. If recent price action is any signal we could be on the verge of another bout of weakness in the housing market and that would surely dampen the v-shaped recovery theory.
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