Yahoo Finance US Housing Market 1Q 2024
VANCOUVER, BC, April 5, 2024 /CNW/ - New US home construction bounced back sharply in February from weather-related weakness at the start of the year, as builders benefitted from slightly more favourable mortgage rates and a dearth of existing houses for sale. Residential housing starts increased +10.7% compared to January, to a 1.52 million unit annualized pace.
Total starts were up +5.9% from 1.436 million units in February 2023. Mild temperatures and a shortage of previously owned homes on the market were factors in the increase. Builders are cutting prices and offering other perks to increase sales, and some are reducing home sizes to better manage rising material costs.
February building permits meanwhile, an indicator of construction activity to come, rose to a 1.518 million rate, up +1.9% from January's 1.489 million. These permits will eventually become starts and will help to underpin residential construction.
Shrewd investors know that construction framing softwood lumber prices are a good leading indicator for US housing activity, including home building and home sales. Don't miss out, get lumber price data updates directly to your desktop every Friday morning.
At the same time, the Madison's Lumber Prices Index for the week ending March 29, 2024 was US$491 mfbm. This is down by -0%, or -$2, from the previous week when it was US$493.
For information regarding the construction of Madison's Lumber Prices Index (species mix, weighed averages) please go here: https://madisonsreport.com/madisons-lumber-prices-index-a-powerful-tool-for-data-driven-decision-making/
February starts of single-family housing, the largest share of the market and construction method which uses the most wood, surged by +11.6%, to a rate of 1.129 million units, from 1.012 million units in January. Single-family authorizations increased +1% to 1.031 million units, from January's 1.021 million units. Building permits are generally submitted two months before the home building is begun, so this data is as indicator of November construction activity.
Madison's Benchmark Softwood Dimension Lumber Prices: March 2024 Compared to Historical Highs and Lows
Madison's Benchmark 2x4 Dimension Lumber Prices: Current Compared to Recent and | ||||||||||
Historical Highs & Lows | 2015 to 2021 | |||||||||
R/L in US$ per thousand board feet |
Current:
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Recent High:
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Previous High:
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% Change:
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Previous
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(net FOB sawmill) | ||||||||||
SYP East Side KD #2&Btr | $ 391 | $ 1,364 | -71.3 % | $ 460 | -15.0 % | $ 311 | 25.7 % | |||
WSPF KD #2&Btr | $ 452 | $ 1,617 | -72.0 % | $ 443 | 2.0 % | $ 249 | 81.5 % | |||
ESPF KD #2&Btr | $ 565 | $ 1,687 | -66.5 % | $ 529 | 6.8 % | $ 350 | 61.4 % | |||
Douglas fir Green | $ 395 | $ 1,344 | -70.6 % | $ 500 | -21.0 % | $ 302 | 30.8 % | |||
WSPF 2x4 STUDS (PET) | $ 400 | $ 1,489 | -73.1 % | $ 445 | -10.1 % | $ 230 | 73.9 % | |||
Looking at lumber prices, in the week ending March 29, 2024, the price of benchmark softwood lumber commodity item Western Spruce-Pine-Fir 2x4 #2&Btr KD (RL) was US$452 mfbm, which is flat from the previous week, said weekly forest products industry price guide newsletter Madison's Lumber Reporter.
STAY AHEAD of US housing price data by getting access to softwood lumber prices. Released every Friday for that week, since 1952 Madison's Lumber Prices is used by the forest products industry as a price guide for North American construction framing dimension softwood lumber. These are, of course, the inputs into US and Canadian home building materials.
That week's price is up by +$8, or +2%, from one month ago when it was $444.
Madison's Lumber Reporter Weekly Summary: March 29, 2024
Framing Lumber:
Demand for solid wood products took a breather as buyers had their immediate needs covered ahead of the Easter holiday weekend.
Spruce-Pine-Fir East and West:
Sales of Western S-P-F commodities in the US ebbed. Producers leaned on solid sawmill order files into mid-April. In Canada Western S-P-F producers held their prices firm as sawmills maintained two- to three-week order files.
Eastern S-P-F trading was punctuated by sporadic and unmeasured fits of demand. Secondary suppliers there showed a wider range of prices depending on the need to move any unwanted leftover material. No heavy discounts were reported.
Southern Yellow Pine East, Central, West:
The slide in Southern Yellow Pine prices continued as there was too much wood available and not enough takeaway. Producers showed more discounted material on their lists by the day. Sales volumes of treated SYP lumber did show promise, however, in the US Southeast thanks to rising home centre demand.
Douglas Fir Green Framing Lumber:
Green Douglas-fir, and Hemlock/Fir producers sold just enough material to maintain or slightly advance their asking prices.
Hem/Fir Coastal Lumber:
Buyers of dry Douglas-fir and Hemlock/Fir commodities continued to digest incoming material. Sawmill prices flattened out for the most part, with reported order files remaining into mid-April. The ongoing strength in the market was largely driven by the supply side – or rather, lack thereof. Steady increases in the cost of extracting logs have led to reduced supply overall.
Stud Lumber:
Producers of Western S-P-F studs confidently held their asking prices firm, showing little to no prompt availability on any materials.
Machine Stress Rated:
MSR producers were content with lead times into mid-April on most items although some mills showing eagerness to move accumulations of some design values at discounted levels.
Douglas Fir Reload and Delivered:
Strong, steady takeaway persisted in the US Northeast. Customers scrambled to cover material for framing packages. Prices of Douglas fir Oriented Strand Board in the East reached numbers that justified switching to plywood in some regions.
Plywood and Oriented Strand Board:
There was a softer feel to the Eastern Canadian panel market even as plywood producers were firm on their prices. Meanwhile OSB prices did jump another several points. A two-tiered market emerged; secondary suppliers covered the small volumes buyers were after.
In the West the Vancouver plywood market remained mired in a flood of US product. With availability of cash wood being nil for several weeks in a row, there were questions as to how long the OSB market could survive strictly on contract volumes.
Cedar incl Shingles & Shakes:
Players expect 2Q 2024 needs will be a time of intense focus for buyers, as field inventories were largely depleted. Timbers, decking, and fencing items remained in tightest supply.
Canadian cedar roofing experienced stable pricing from the mills and an apparent balance between supply and demand.
* Madison's Lumber Prices, weekly, are a good forecast indicator of US home builder's current lumber buying activity ——> DETAILS
US new home sales in February were almost flat, at 662,000 compared to January's revised up figure of 664,000 and were up 5.9% from one year ago. New single-family home inventory in February remained elevated at a level of 463,000, up +1.3% from January. This represents an 8.4 months' supply at the current building pace. A measure near a 6 months' supply is considered balanced. However, with only a 2.9 months' supply of existing homes for sale, new home inventory can remain above this balanced measure.
"As interest rates subside over the course of 2024, additional home buyers will be priced into the market and new construction will be needed to meet this demand. Nonetheless, as existing home inventory is expected to rise this year, watching new home inventory will be key during the second half of this year," explained the US National Association of Home Builders in a blog post.
The median new house price in February was down -2.5%, to US$400,500, the lowest since June 2021, and a -7.6% drop from a year ago.
Houses under construction accounted for 58.7% of inventory. Homes yet to be built made 22.9% of supply, while completed houses accounted for 18.4%. With respect to the types of inventory, completed and ready-to-occupy inventory has increased +23% over the last year, rising to 85,000 homes. Homes advertised for sale but not started construction have increased almost +18% over the last year to 106,000. In contrast, homes available for sale that are under construction have declined -2% to 272,000.
As for those lumber prices, compared to the same week last year, when it was US$365 mfbm, in the week ending March 29, 2024, the price of WSPF 2x4 #2&Btr KD (RL) price was up by +$96, or +27%. Compared to two years ago when it was $1,410, that week's price is down by -$958, or -68%.
To subscribe to Madison's Lumber Reporter, simply fill out an order form here: https://madisonsreport.com/subscribe/
Established in 1952, Madison's Lumber Prices is your premiere source for North American softwood lumber news, prices, industry insight, and industry contacts. The weekly Madison's Lumber Reporter publishes current Canadian and US construction framing dimension lumber and panel wholesaler pricing information 50 weeks a year and access to historical pricing as well.
Madison's offers a variety of products to meet your information needs regarding the North American forest products industry including:
Madison's Lumber Prices: https://madisonsreport.com/products/lumber-price-dashboard/
Madison's Heating Wood Pellet Prices: https://madisonsreport.com/products/pellets/
Madison's British Columbia Coast Log Prices: https://madisonsreport.com/products/bc-coastal-logs/
Madison's Forest Pulse: https://madisonsreport.com/products/forest-pulse/
Madison's North America Sawmill Listings: https://madisonsreport.com/products/sawmill-directory/
Madison's Sawmill Curtailment Lookout: https://madisonsreport.com/products/sawmill-lookout/
SOURCE Madison's Lumber Reporter
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