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Lumber and plywood prices have jumped through the roof in the U.S. Building materials prices will retreat in 2022, returning to pre-pandemic levels by 2023. They reflect housing-specific issues, not general inflation. (The general inflation is coming, I have argued, but lumber is not an early sign.)

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Wood products prices typically fluctuate more than most goods, because homebuilding can move up or down much faster than sawmill capacity can. Wood products have other uses that are more stable, such as non-residential construction, crates and pallets, but new housing is the largest usage, followed by home repairs and remodeling, and both of those activities are highly cyclical.