By: The Working Forest Staff
For the week ending February 19, 2021 North America construction framing dimension softwood lumber prices surpassed a threshold that industry veterans never imagined, in their wildest dreams, they would ever see, said weekly lumber industry price guide newsletter Madison’s Lumber Reporter.
Madison’s Lumber Reporter pegged the wholesaler sales prices of benchmark softwood lumber commodity Western Spruce-Pine-Fir KD 2×4 #2&Btr at US$1,012 mfbm. As mentioned at the end of last year, market conditions for softwood lumber — and indeed all building materials — have been indecipherable. Into February 2021 the momentum of US home sales and house prices continue upward unabated, driving building materials costs higher right alongside.
Most of the continent is still in deep winter weather, however the major home builders, retailers, and lumber resellers are already making orders for the coming construction season this spring. Expectations are for a very hot real estate market, making the projection for near- to mid-term lumber prices also quite strong.
Western S-P-F lumber and studs trading in the United States slowed considerably as cold snaps hit much of the continent late the previous week and early in the current week. With construction activity impacted by the frigid climate, buyers of studs particularly took a step back to assess their positions and hope for a price correction.
As snow flurries socked in many key markets, Western S-P-F producers in Canada related strong but low-key inquiry and follow-through. Benchmark item 2×4 R/L #2&Btr broke the $1,000 barrier, rising $20 to US$1,012 mfbm. Sawmill order files stretched into mid-March, with two weeks typically added to that timeline for delivery.
To the astonishment of all, in the week ending February 19, 2021, the price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr climbed +$20, or +3%, to US$1,012 mfbm, from $992 the previous week, said Madison’s Lumber Reporter. That week’s price is +$56, or +6%, more than one month ago when it was $926.
“Southern Yellow Pine producers were largely off the market as winter weather lashed most of the Southern portion of the United States. Sales activity was subdued by the cold snap, but the market remained vastly undersupplied. ”
Compared to the price one-year-ago, of US$440 mfbm, last week benchmark softwood lumber item Western S-P-F KD 2×4 #2&Btr was selling for US$1,012 mfbm which is +572, or +130% more.
At a very unusual time of year, not when folks normally want to be preparing to move, sales of new single-family houses in the US for January 2021 were at a seasonally adjusted annual rate of 923,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.
This is +4.3% above the revised December rate of 885,000 and is +19.3% above the January 2020 estimate of 774,000.
Softwood lumber prices jumped by a historic +73% on a year-on-year basis in January 2021.
There were 307,000 new homes on the market last month, up from 299,000 in December. At January’s sales pace it would take 4 months to clear the supply of houses on the market, down from 4.1 months in December. About 72.4% of homes sold last month were either under construction or yet to be built.
The number of properties sold for which construction hadn’t yet started increased to 277,000 from 256,000 in the prior month, while the number of homes for sale rose to 302,000, the most since May 2020.
The median sales price of new houses sold in January 2021 was US$346,400, which is up +5.3% from December 2020.
The US National Association of Realtors reported last week that the supply of previously owned homes available for sale plunged to a record low in January. That has pushed buyers toward the market for new homes. Demand for housing is being driven by Americans seeking more space for home offices and schooling as the year-long coronavirus pandemic drags on.