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Lumber Prices Up 120%: Will Homebuilders Be Hurt?

By Blake Bos - Apr 17, 2013 at 4:32PM

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Is this spike in lumber prices going to hurt your investment in homebuilders?

The National Association of Homebuilders index, or the HMI, has dropped over concerns that homebuilders are struggling with, among other things, construction costs rising faster than appraised values. One major contributing factor to this is the current runaway skyrocketing lumber prices.

In this video, Motley Fool consumer goods analyst Blake Bos tells investors what's behind these sky-high lumber prices and how to play the housing boom as an investor while keeping this risk in mind.

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Stocks Mentioned

PulteGroup, Inc. Stock Quote
PulteGroup, Inc.
PHM
$45.69 (1.58%) $0.71
Weyerhaeuser Co. Stock Quote
Weyerhaeuser Co.
WY
$40.34 (3.60%) $1.40
D.R. Horton, Inc. Stock Quote
D.R. Horton, Inc.
DHI
$74.78 (2.63%) $1.92
KB Home Stock Quote
KB Home
KBH
$34.81 (1.25%) $0.43
Taylor Morrison Home Corporation Stock Quote
Taylor Morrison Home Corporation
TMHC
$28.83 (1.02%) $0.29

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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