Sharply increased homebuilding activity is being supported by lean inventories, especially for previously owned homes.
As true winter weather came on across the continent, total residential starts in the US for January 2021 fell by -6% to a 1.58 million annualized rate. Permits for future homebuilding soared again, this time by +10.4% to a rate of 1.881 million units, in January.
January starts of single-family housing, the largest share of the market and construction which uses the most wood, reversed the previous ‘months climb almost exactly, falling by -12% to a 1.16 million pace. Single-family building permits, meanwhile, rose by +3.8% to a rate of 1.27 million units in January.
Shrewd investors know that construction framing softwood lumber prices are a good leading indicator for US housing activity, including home building and home sales.
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US Housing Total and 1-Unit Starts January & Benchmark Softwood Lumber Prices February 2021
In the week ending February 12, 2021, the price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr rose another +$32, or +3%, to US$992 mfbm, from $960 the previous week, said Madison’s Lumber Reporter. Last week’s price is +$66, or +7%, more than it was one month ago when it was $926.
Compared to the price one-year-ago, of US$402 mfbm, last week benchmark softwood lumber item Western S-P-F KD 2×4 #2&Btr was selling for US$992 mfbm which is +590, or +147% more.
Benchmark Softwood Lumber Commodity Western Spruce-Pine-Fir Price: February 2021
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.
- Madison’s Lumber Prices, weekly, are a good forecast indicator of US home builder’s current lumber buying activity ——> DETAILS
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages
Acutely Limited Lumber Supply Continued to Dictate Market Machinations, Pushing Prices Higher
Field inventories of Western S-P-F lumber in the United States were as low as ever. High prices and tight supply have continually put the kibosh on speculative buying. Sawmill order files at some producers were late-February while others were apparently into mid- or late-March. Low grade was in particularly high demand as many buyers looked for cheaper options of any kind.
Sales volumes of Canadian Western S-P-F commodities strengthened late in the week and sawmills in Canada boosted their asking prices across the board on dimension. Sawmill order files were solidly into the week of March 8th.