US Housing Starts & Softwood Lumber Prices: December 2020 and January 2021 - Madison's Lumber Reporter Français
VANCOUVER, BC, Jan. 27, 2021 /CNW/ - Total residential starts in the US for December 2020 climbed by +5.8% to a 1.67 million annualized rate. Permits for future homebuilding accelerated +4.5% to a rate of 1.709 million units, in December, and totalled 1.452 million for full-year 2020. This is a +4.8% increase from 2019.
December starts of single-family housing, the largest share of the market and construction which uses the most wood, climbed +12% to a 1.34 million pace. It was the eighth straight monthly increase, the longest such stretch in 50 years. Single-family building permits raced up +7.8% to a rate of 1.226 million units in December.
Homebuilding is being supported by lean inventories, especially for previously owned homes.
As January 2021 marched on, lumber prices corrected downward somewhat from the unseasonal increase for the first week of the year. In the week ending January 22, 2021, the price of benchmark softwood lumber commodity item Western S-P-F KD 2x4 #2&Btr dropped by -$50, or -5.6%, to US$894 mfbm, from $944 the previous week. Last week's price is +$20, or +2.3%, more than it was one month ago when it was $874.
US Total and 1-Unit Housing Starts Dec 2020 & Benchmark Softwood Lumber Prices Jan 2021
"Softwood lumber players were more circumspect last week, as lower asking prices at sawmills enticed some buyers." — Madison's Lumber Reporter
After popping up by a sizeable degree in the first full work week of 2021, last week benchmark softwood lumber and panel prices corrected downward to more sustainable levels as demand continued strong but supply was able to serve a burst of orders. This year sawmills across Canada and the US are well poised to produce ample lumber volumes for white-hot construction activity across the continent.
Indeed, Canadian and US housing starts and home sales data for full-year 2020 showed extremely robust real estate markets, which are not going to slow down through this year, and possibly through 2022. One important metric to note is that the largest demographic entering the first-time home buyer cohort is Millennials. This suggests sustained, longer-term high demand for home sales. Strong home sales inevitably leads to high rates of home construction, which of course means building materials — specifically lumber — will continue to sell well for quite some time to come.
- US single-family housing permits for December 2020 rose +7.8% to a 1.23 million pace, the fastest since 2006
- Construction climbed in three of four regions, led by a +32% surge in the Midwest, with starts in the Northeast seeing the lone decline
- The total number of residential projects authorized but not yet started edged lower to 185,000, but remains historically strong, suggesting builder backlog remains robust
* Madison's Lumber Prices, weekly, are a good forecast indicator of US home builder's current lumber buying activity ——> DETAILS
Benchmark Softwood Lumber Prices North America: January 2021
The median sales price of a previously owned single-family house in the U.S. reached US$314,300 in December, up +93% in 11 years.
"US Western S-P-F sawmills navigated another sneaky strong week as winter deepened further. Prices were adjusted down by most producers in an effort to find trading levels appealing to buyers, and a steady undercurrent of business kept decent volumes of WSPF commodities moving.
After another quiet start last week, Canadian Western S-P-F sales activity picked up around Thursday as buyers' scant inventories generated a spate of purchasing." — Madison's Lumber Reporter
Benchmark Softwood Lumber Commodity Western Spruce-Pine-Fir KD 2x4 #2&Btr Prices: Jan 2021
Softwood lumber manufacturing expectations, therefore, are that lumber prices might soften somewhat as more supply continues to come online, but ongoing very strong demand means prices will remain elevated compared to historical norms.
The below table is a comparison of recent highs, in Sept 2020, and current January 2021 benchmark dimension softwood lumber 2x4 prices compared to historical highs of June 2018 and compared to recent lows of Sept 2015:
Benchmark 2x4 Dimension Lumber Prices: Current Compared to Recent and |
|||||||||||
Historical Highs, and to Recent Lows |
2015 to |
2021 |
|||||||||
R/L in US$ per thousand board feet |
Current: |
Recent High: |
% |
Previous High: |
% Change: |
Previous Low: |
% |
||||
(net FOB sawmill) |
1/15/2021 |
||||||||||
SYP East Side KD #2&Btr |
$ |
1,145 |
$ |
985 |
16.2% |
$ |
460 |
148.9% |
$ |
311 |
268.2% |
WSPF KD #2&Btr |
$ |
944 |
$ |
960 |
-1.7% |
$ |
443 |
113.1% |
$ |
249 |
279.1% |
ESPF KD #2&Btr |
$ |
1,055 |
$ |
1,080 |
-2.3% |
$ |
529 |
99.4% |
$ |
350 |
201.4% |
Douglas fir Green |
$ |
845 |
$ |
940 |
-10.1% |
$ |
500 |
69.0% |
$ |
302 |
179.8% |
WSPF 2x4 STUDS (PET) |
$ |
806 |
$ |
900 |
-10.4% |
$ |
445 |
81.1% |
$ |
230 |
250.4% |
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.
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:
Keta Kosman
Publisher
Madison's Lumber Reporter, est. 1952
Vancouver, BC, Canada
www.madisonsreport.com
604 319-2266
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/madisons-reporter/
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Madison's Canadian Sawmill Listings: https://madisonsreport.com/products/madisons-directory/
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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