What is the deal with why the cost of building materials has skyrocketed?
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Folks reduced their building activity.
Manufacturers and distributors reduced their inventories.
Now folks are buying stuff again.
Businesses are bidding up the price of materials.
This too shall pass.
Costs will decline as manufacturers ramp up production.
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The costs may not decline though. Sometimes the crisis price becomes the new normal. The market does adjust, but not always back to where it was. It's not like building costs are the only thing that's gone up. House prices. General goods.
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Are we experiencing a boom in construction?
Well, no. But we are up significantly over March 2020.
FRED graph
fred.stlouisfed.org/series/HOUST
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If you think the housing chart looks a bit peaky, this is the FRED chart I'm watching most keenly these days.
fred.stlouisfed.org/series/WALCL
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