So the price of lumber futures has hit a six-year high. So what? It’s a great indicator of Wall Street’s confidence in the home-building market.
Anyone can say that housing is recovering (including us), but that lumber futures number tells us that investors honestly believe that homebuilding is going to be increasing in the near future. They’re betting money on it.
Prices have surged 37 percent this year, more than any of the 24 commodities tracked by the Standard & Poor’s GSCI Spot Index. Lumber has more than doubled since January 2009, when the recession and a collapse in the U.S. housing market left a glut of wood. (Emphasis mine.)