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PalletCentral • January-February 2021
palletcentral.com
in house prices, which are now about 16 percent above
year ago levels for existing units. The jump in housing
prices has boosted homeowner net worth by nearly $1
trillion – yes, that is correct – trillion.
The very low interest rates are one reason housing
activity rebounded so sharply. Besides interest rates,
those people that can or have to work from home
found their housing units too small to be comfortable
when they had to quarantine. Plus, with no need to
commute every day to work, many people looked for
larger homes with a yard in suburban areas, a big plus
if you have children.
The stronger than expected level of housing starts,
combined with the jump in remodeling expenditure,
drove lumber demand up faster than the lumber
producers expected. Because of falling prices in the
second quarter and with expectations they would
remain low, producers curtailed production and
dealers cut inventories. When demand did recover,
the mills had difficulty getting production levels up
quickly. Labor and log supplies proved difficult to
The Fed will have to come to terms
with the massive purchase of
federal debt in 2020 and early 2021.
Inflationary pressures will become
evident in late 2021 because of the
excess money supply growth.
