US Housing Market June & Softwood Lumber Prices July: 2023
VANCOUVER, BC, July 27, 2023 /CNW/ - US housing starts corrected sharply downward in June 2023, demonstrating weakness yet in that important economic indicator. However, stability in the real estate market does seem to be returning, as both housing starts and new home sales are at a better equilibrium compared to the volatility of the previous couple of years. The momentum of demand for housing appears to continue quite strong, especially in demand for existing homes.
After a big jump the previous month, total housing starts in the US fell by -8% in June, to 1.434 million units, compared to the downwardly revised 1.559 million units reported for May 2023, and were down -8% from the June 2022 rate of 1.561 million units.
Madison's Lumber Prices Index July & US Housing Starts June: 2023
An indicator of construction activity to come, building permits also tumbled, down by almost -4%, at 1.440 million units from the May rate of 1.496 million. This is -15% below the June 2022 rate of 1.701 million. These permits will eventually become starts and will help to underpin residential construction.
Meanwhile, the Madison's Lumber Prices Index for the week ending July 21, 2023 was US$498 mfbm. This is up by +0.8%, or +$4, from the previous week when it was US$494.
Still very high compared to historical, housing completions fell by more than -3% from May, to an estimated annual rate of 1.468 million housing units. Units under construction also remained high compared to historical averages, at 1.682 million units. Of those, 688,000 were single-family homes, compared to 694,000 in May.
June starts of single-family housing, the largest share of the market and construction method which uses the most wood, dropped as well, down -7% to a rate of 935,000 units from May's upwardly revised 1,005,000 units. Single-family authorizations were at 922,000 units, which is more than -2% below the upwardly revised May figure of 907,000 units. Building permits are generally submitted two months before the home building is begun, so this data is as indicator of July construction activity.
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.
Madison's Benchmark Top-Six Softwood Lumber and Panel Prices: Historical Averages
Madison's TOP SIX Benchmark | ||||||||||
Dimension Softwood Lumber and Panel Prices | ||||||||||
July 25, 2023 | ||||||||||
Prices are US Dollars per 1,000 fbm | This | Previous | Change | Month | Change | Year | Change | |||
(net FOB sawmill) unless noted * | Week | Week | $ | % | Ago | $ | % | Ago | $ | % |
WSPF KD 2x4 R/L #2&Btr | 458 | 458 | 0 | 0 % | 390 | +68 | 17 % | 664 | -206 | -31 % |
SYP East KD 2x4 R/L #2&Btr | 425 | 418 | +7 | 2 % | 417 | +8 | 2 % | 725 | -300 | -41 % |
ESPF KD 2x4 R/L #2&Btr | 560 | 555 | +5 | 1 % | 492 | +68 | 14 % | 765 | -205 | -27 % |
WSPF KD 2x4 PET Stud | 482 | 476 | +6 | 1 % | 391 | +91 | 23 % | 530 | -48 | -9 % |
Douglas Fir Green R/L 2x4 | 600 | 550 | +50 | 9 % | 430 | +170 | 40 % | 570 | +30 | 5 % |
CSPlywood Toronto 3/8" *(CDN$/msf) | 730 | 723 | +7 | 1 % | 637 | +93 | 15 % | 735 | -5 | -1 % |
www.madisonsreport.com • [email protected] • 604 319-2266 • Madison's Lumber Reporter | ||||||||||
Looking at lumber prices, in the week ending July 21, 2023, the price of benchmark softwood lumber commodity Western Spruce-Pine-Fir 2x4 #2&Btr KD (RL) was US$458 mfbm, which is flat compared to the previous week, said weekly forest products industry price guide newsletter Madison's Lumber Reporter. That week's price is up by +$68, or +17%, from one month ago when it was $390.
Sustained demand fuelled enduring takeaway of Western S-P-F commodities according to traders in the United States. Even as delivery times stretched into mid-August and beyond, buyers had little choice but to be engaged as end-users were hungry for material to feed busy jobsites. With prices rising on standard grade bread-and-butter widths and stud trims, the adage from an experienced player that 'the best deals were those already made' never rang more true. Future supply was a constant topic of conversation with wildfire activity in the Pacific Northwest still raging out of control in many regions. The Flat Fire in southern Oregon has burned through upwards of 5,500 acres in steep and remote terrain.
Demand for Western S-P-F continued to chug along at a solid pace in Canada, considering the time of year. Scorching hot temperatures all over didn't detract from bustling business as buyers came back to the well frequently to cover near-term needs. Larger, national producers maintained three- to four-week order files on most items, while many regional suppliers showed prompt availability on the odd width – which was quickly snapped up in most cases.
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
The U.S. Census Bureau and the US Department of Housing and Urban Development released July 26 new home sales and house price data. New home sales comprise 10% of real estate activity and are considered a leading housing market indicator as they are recorded when contracts are signed.
Approaching more stability after the volatility of the past couple of years, sales of new single-family homes in the US significantly corrected down in June, at 697,000 units, which is -2.5% lower than May's very downwardly revised 715,000, but is up almost +24% compared to June 2022 when it was 563,000 units.
US NEW Home Sales June & Madison's Lumber Prices Index July: 2023
At the sales pace in June, it would take 7.4 months to clear the supply of new houses on the market, up from 6.7 in May. There were 432,000 new homes on the market at the end of last month, up from 429,000 in May. Houses under construction made up 60% of inventory, with those yet to be started accounting for 23%.
The median sales price of a new home in June was almost flat, at US$415,400, compared to US$416,300 in May, and is down -4% from one year ago.
As for those lumber prices, compared to the same week last year, when it was US$664 mfbm, the price of Western Spruce-Pine-Fir 2x4 #2&Btr KD (RL) for the week ending July 21, 2023 was down by -$206, or -31%. Compared to two years ago when it was $555, that week's price is down by -$97, or -17%.
Madison's Western S-P-F 2x4 Lumber Prices: July 2023
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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.
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SOURCE Madison's Lumber Reporter
Keta Kosman, Publisher, Madison's Lumber Reporter, est. 1952, Vancouver, BC, Canada, www.madisonsreport.com, 604 319-2266
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