Cost Of Building A Home Headed Back Up As Lumber Rips Higher To Finish 2021
Authored by Mike Shedlock via MishTalk.com,
Looking to build a house? Lumber prices tell you what direction prices are headed.
After hitting record highs near $1700 the price of lumber crashed below $500.
The respite didn’t last long. Lumber closed December at $1127.70.
Historically, the normal price would be in the range $250 to $400. That makes lumber about 3 times higher than what builders are used to paying.
Builders will pass on these hikes as well as the price of labor and other materials. And land prices are out of sight in many areas.
Not Inflation
Economists say this isn’t inflation. And none of it is in the CPI.
But if it’s not inflation, what is it?
Of course it’s inflation, just not consumer inflation. That makes the CPI and PCE numbers less than useless measures of inflation.
Every Measure of Real Interest Rates Shows the Fed is Out of Control
As noted on December 29, Every Measure of Real Interest Rates Shows the Fed is Out of Control.
Two of those measures, especially PCE, the Fed’s preferred measure are ridiculous.
My alternate measure, a housing-adjusted CPI, is at 9.31% making real interest rates -9.23%
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Tyler Durden Sun, 01/02/2022 – 19:40
