- A double in lumber prices so far in 2021 has helped push up the stock prices of companies involved in the production of wood.
- The commodity has seen a surging price as demand for homes continues to increase, and as supply constraints continue.
- These 4 stocks have seen strong rallies so far in 2021 as prices for lumber soar.
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Lumber prices have doubled so far in 2021 and are up 250% since last spring as the commodity gets squeezed on both the demand side and the supply side.
A consistent rise in demand for homes, combined with tightening supply of the commodity due to timber constraints in Canadian forests has led to the commodity surging to a record $1,500 per thousand board feet this week.
The surge in prices has added on average $36,000 to the costs of building an average single family home, according to the National Association of Homebuilders. But that’s not denting demand for new homes, with median housing sale prices hitting records throughout the pandemic and into 2021.
And an aging millennial population that is transitioning to mortgage debt from student loan debt will likely help sustain demand for new homes in the years ahead.
This all sets up a favorable backdrop for companies that manage forests for timber, operate sawmills, and produce home building products out of wood.
These are the 4 lumber-related stocks that have seen strong rallies so far in 2021 as prices for lumber soar.
Market Cap: $30 billion
YTD Performance: 17%
3. West Fraser Timber Co.
Market Cap: $9.4 billion
YTD Performance: 23%
2. Boise Cascade
Market Cap: $2.8 billion
YTD Performance: 44%
1. UFP Industries
Market Cap: $5.4 billion
YTD Performance: 56%