Construction Rising Lumber Costs

[Mike Terry]

At the beginning of this year my partner and we’re considering building new houses due to the short supply of distressed properties in our market. Since then lumber prices alone are adding $24,000 to the cost of a typical single family home. This will continue to pressure affordability and discourage new home development at a time of record demand. Existing homes are appreciating at a rate reminiscent of the early 2000’s. When will rising costs slow the demand and to what extent? Share your thoughts.

[Chris Levarek]

@Mike Terry When the music stops. Easy debt equals the ability to pay the rising home prices. As soon as rates rise, or more importantly, as soon as the government can no longer "suppress" the rising inflation. I expect once the stocks stop getting injected with printed capital, stocks will fall and the economy will enter a recession. Ultimately, conditions will invert like a normal cycle. However, if capital is able to continue to be printed and injected into the economy, it could go on for a bit.