Lumber fell the most in two weeks as confidence among U.S. homebuilders unexpectedly dropped in February, signaling slower demand.
Builder sentiment in February fell to 46 from January’s 47, which matched the highest reading since April 2006, a National Association of Home Builders/Wells Fargo report showed today. The median forecast in a Bloomberg survey of economists projected a rise to 48. Lumber prices surged 42 percent in the past 12 months on signs of a rebound in the U.S. housing industry.
“This is one group that a lot of people look at, and believe in,” so the report caused prices to fall, Hakan Ekstrom, the president of Wood Resource International in Seattle, Washington, said by telephone.
Lumber futures for May delivery fell 2.5 percent to $389.70 per 1,000 board feet on the Chicago Mercantile Exchange, the biggest drop since Jan. 30. Earlier, prices touched $401.80, the highest since April 2005.
“At $400, people are saying ‘maybe we should wait to buy,’” Ekstrom said.