U.S. Markets closed
  • S&P 500

    4,166.45
    -55.41 (-1.31%)
     
  • Dow 30

    33,290.08
    -533.37 (-1.58%)
     
  • Nasdaq

    14,030.38
    -130.97 (-0.92%)
     
  • Russell 2000

    2,237.75
    -49.71 (-2.17%)
     
  • Crude Oil

    71.50
    +0.46 (+0.65%)
     
  • Gold

    1,763.90
    -10.90 (-0.61%)
     
  • Silver

    25.84
    -0.01 (-0.04%)
     
  • EUR/USD

    1.1865
    -0.0045 (-0.3797%)
     
  • 10-Yr Bond

    1.4500
    -0.0610 (-4.04%)
     
  • Vix

    20.70
    +2.95 (+16.62%)
     
  • GBP/USD

    1.3809
    -0.0115 (-0.8272%)
     
  • USD/JPY

    110.1500
    -0.0810 (-0.0735%)
     
  • BTC-USD

    36,155.20
    -1,616.38 (-4.28%)
     
  • CMC Crypto 200

    888.52
    -51.42 (-5.47%)
     
  • FTSE 100

    7,017.47
    -135.96 (-1.90%)
     
  • Nikkei 225

    28,964.08
    -54.25 (-0.19%)
     

ETFs to Benefit from Soaring Lumber Prices

·2 min read

Lumber is currently the hottest commodity in the US, as prices have more than tripled over the past year. Surging demand for suburban housing, thanks to record low mortgage rates and migration from cities, and a frenzy of home renovations, continue to push lumber prices higher.

Lumber prices had plunged in March last year and sawmills had curtailed production when coronavirus related shutdowns started. By April, almost 40% of North America’s sawmill capacity was shut down, per WSJ. While mills have ramped up production significantly, it still remains about 16% below the 2006 peak, which is the last time the demand from housing was so high.

Per Freddie Mac, the current supply of single-family homes is 3.8 million units less than the demand. Home builders would need to construct between 1.1 million and 1.2 million single-family homes per year to meet long-term demand, according to the National Association of Home Builders. And they’re going to need a lot of wood to build those homes, as wood-framed units make up 90% of new homes, per Bloomberg.

The iShares Global Timber & Forestry ETF (WOOD) holds 25 timber & forestry stocks while the Invesco MSCI Global Timber ETF (CUT) invests in 81 timber companies. West Fraser (WFG), the largest lumber producer in North America, Weyerhaeuser (WY), Rayonier (RYN) and Potlatch (PCH) are among the top holdings in these ETFs.

To learn more about these ETFs, which are up over 80% over the past year, please watch the short video above.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Weyerhaeuser Company (WY) : Free Stock Analysis Report
 
Rayonier Inc. (RYN) : Free Stock Analysis Report
 
Potlatch Corporation (PCH) : Free Stock Analysis Report
 
INVS-TIMBER (CUT): ETF Research Reports
 
ISHARS-GL TF (WOOD): ETF Research Reports
 
West Fraser Timber Co. Ltd. (WFG) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research
 
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report