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Home prices across the US surged more than +10% in December, indicating a strong demand in the housing market. According to the S&P CoreLogic Case-Shiller Indices, home prices continued the trend of accelerating that began in Summer 2020 as the coronavirus pandemic drove people from urban apartments to buy suburban homes.

WSPF-SYP-ESPF-2x4 Softwood Lumber Prices-2year-US-Median-House-Prices FEB 2021
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Softwood Lumber Prices as Leading Indicator of US House Prices
The median sales price of new houses sold in January 2021 was $346,400, which is up more than +5% from a year ago.

A federal index, meanwhile, of metro area house prices rose +9% last year, the biggest increase in 30 years of data. The Federal Housing Finance Agency‘s national price index rose +10.8%, which is also a record.

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages

Madison's Softwood Lumber Benchark green and KD Construction Framing Dimension Softwood Lumber and Panel Prices MAR 2021
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Currently it is common for sellers to receive multiple bids, and for buyers to waive contingencies like inspections and appraisals to make their offers more attractive. These soaring prices are being driven by three factors: mortgage rates under 3%, a demographic bulge as the millennial generation reaches prime home-buying age, “the great reshuffling.”
Due to the pandemic people are reassessing what their needs are in a house. A family that was satisfied with three bedrooms might want one more for a home office. A large backyard becomes more important when the kids are stuck at home.

Benchmark Softwood Lumber Price Western Spruce-Pine-Fir 2×4: 2018 – 2021

Western Spruce-Pine-FIr KD 2x4 #2&Btr prices MAR 2021
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For the week ending March 19, even as sales waned according to Western S-P-F sellers in the US, the undersupplied nature of the market remained apparent. One savvy trader noted, “Inventory is your friend.” Sawmill order files were into the first and second weeks of April depending on the source and item. Logistical efficiency was also variable from mill-to-mill.
While Western S-P-F producers in Canada continued to emphasize strong demand, sales were definitely quieter last week. Sawmill order files were into the week of April 12th and shipments remained roughly three weeks behind that. Low grade was again a focus among active buyers as its discount to #2&Btr attracted more business. 

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages

Madison's Softwood Lumber Benchark green and KD Construction Framing Dimension Softwood Lumber Prices MAR 2021
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STAY AHEAD of US house 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.
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: https://madisonsreport.com/subscribe/