The 2021 US housing market has seen a dramatic rise in prices, which has led to an increase in lumber demand. Newsday LLC / Contributor/Getty ImagesAberdeen Standard's Robert Minter stated that Lumber prices are currently low after a plunge of 65%.According to the investment strategist, prices should be supported because Americans want to return home.There are signs that the US housing market may be cooling. Family home sales fell in June.Subscribe to our daily newsletter 10 Things Before The Opening Bell.According to Robert Minter, an Aberdeen Standard Investments strategist, Lumber prices are currently low after a 65% decline from May's record high. This is because Americans want new homes.In the first half of the year, lumber futures prices soared to record levels. They reached a record high of $1700 per 1,000 board feet due to strong demand for new homes and a home-improvement boom. They have fallen to around 65% to $607 since Tuesday due to a decrease in demand and increased production.Minter, a director of Aberdeen's investment strategy, said earlier this week that lumber "looks a bit cheap." Minter said that the COVID-19 story was far from over and that many Americans still want to move homes if they can work from home.He said that people are moving from the area they used to live in order to be able to move to where they want. "All those who want to move from the city center to the suburbs to a cheaper place have not all moved."Continue reading: Hakan Kaya's fund was one of the best performers worldwide in the past year. He shared with us the 4 commodities that he still believes in for long-term gains and why stocks are not something he invests in.Minter noted that many housing companies have stopped accepting orders due to rising construction costs and labor shortages. Minter stated that this indicates that the market is still in demand.The US housing market is still hot. The closely-watched S&P CaseShiller house price index grew an unprecedented 16.6% year-on–year in May. This is up from 14.8% in April. According to the US Census Bureau, new housing starts increased 6.3% month-on-30 in June to an annualized rate 1.64 million.Lumber prices have risen slightly in the past two weeks. Futures contracts rose from below $540 per 1,000 board feet in July to above $600 by August.According to the Census Bureau, sales of single-family homes fell 6.6% in June. This is a sign that the housing boom may be slowing down. In June, applications to build also declined which suggests a slower pace for construction in the future.Analysts expect lumber to continue falling until it reaches pre-pandemic levels as demand and supply balance out. Insider was told by Michael Gayed, Toroso Investments fund manager, that "if it is mean reversion you can't keep at these levels."
