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3 Buy-Rated Stocks That Will Continue to Benefit as Lumber Prices Continue to Rise

Stock MarketsMay 10, 2021 01:30PM ET
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© Reuters. 3 Buy-Rated Stocks That Will Continue to Benefit as Lumber Prices Continue to Rise

Increasing demand from the red-hot housing market and supply constraints have been driving a rise in lumber prices. Because these prices are likely to go up even more in the coming months with housing activities gaining pace, we think it is wise to bet on lumber stocks Louisiana-Pacific (NYSE:LPX), PotlatchDeltic (NASDAQ:PCH), and Masonite International (NYSE:DOOR). Read on.Several sawmills were closed amid the COVID-19 pandemic as lockdown mandates and travel restrictions caused a labor shortage. The low supply and rising demand from the booming housing market have been driving rising lumber prices. Along with demand for the construction of new homes, home-renovation trends amid the pandemic have contributed to the increase in demand for lumber. Lumber prices have tripled over the past year and are expected to keep rising.

According to the National Association of Home Builders (NAHB), the surge in lumber prices in the past year has added $35,872 to the price of an average new single-family home and $12,966 to the market value of an average new multi-family home. And because interest rates are expected to remain low for the foreseeable future, rising housing activities should continue to drive-up lumber prices.

Given this backdrop, we think it is wise to bet on Louisiana-Pacific Corporation (LPX), PotlatchDeltic Corporation (PCH), and Masonite International Corporation (DOOR) because they are likely to benefit from the rise in lumber prices.

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3 Buy-Rated Stocks That Will Continue to Benefit as Lumber Prices Continue to Rise
 

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