BC Lumber Exports to India ; Canadian Housing Starts ; North American Hardwood Lumber Exports ; HMI Index Soars in 2Q ; Wildfires US Forest Service “Healthy Forests Act ; Madison’s Timber Preview ; Short-Term Timber Forecast : Japan; 2Q Financial Results ; US Pending Home Sales, Prices Residential and Non-Residential Construction and Spending ; Madison’s Investment Rx ; Canadian Sawmills : May 2013 ; US Home Sales, House Prices ; Quarterly Results ; BC Sawmill Explosion
August 26, 2013
A sudden surge in the value of BC Spruce-Pine-Fir lumber exported to India in May and June, by 75.4 per cent, has prompted a conversation about that continually-developing, and important, new market for softwoods.
According to BC Stats data released Tuesday, the value of BC SPF lumber exports to India spiked from March, at $653,975, to May, when it was $2.66 million. The value then settled to $2.27 million for June. This is interesting because volumes in May and June also jumped but to a smaller degree: 73.6 per cent.
The difference is puzzling because, according to veteran exporters from BC to India, 85 per cent of shipments have been plain old WSPF KD 2×10 R/L #2&Btr.
Huge Jump in Value of SPF for May and June
Prices on that commodity were falling in April and May so its strange that the value shot up by more than the volume in May and June. The majority of western spruce lumber going into India is used for door parts, such as frames and panels.
Industry sources Madison’s contacted Thursday said that, after a lull which began in February when prices started rising, they have only just started booking orders again, now that prices have stabilized. It is difficult to say yet, but some expectations are that those increased volumes may be maintained in the short term.
Others question the developing circumstance, pointing out that the rupee has been falling compared to the dollar, so one would expect Indian imports to drop rather than rise so sharply in such a short time frame.
To date there has been no discernible seasonality to India’s importing of BC lumber, however there does seem to be a trend of bulk purchases over the course of a two-month period, in spring, followed by extended drops in buying. Some watchers believe the significant jump this year is a similar trend.
There are also suggestions that — while North American prices were skyrocketing earlier this year — customers in India turned to Europe for supply. That tide might be returning to this direction, now that commodity lumber prices from Canada and the US seem to have stabilized at lower levels than they were in March.
A contact at BC Forestry Innovation Investment mentioned to Madison’s Thursday that Myanmar, previously a big supplier of hardwood logs to India, will be putting into effect a complete ban on raw log exports. This move is a bid to increase exports of higher-earning finished products. If buyers in India expect to soon find themselves without wood from traditional sources, perhaps they have started looking elsewhere. Like to the west coast of Canada.
Please see chart on Page 6.
On March 3, 2013, an EU Timber Regulation (EUTR) came into effect to stop the circulation of illegally logged wood in the European Union.
In view of the looming EUTR, on April 1, Myanmar announced a draft forestry law to ban the export of the country’s raw, unprocessed logs. The law, drafted by the Ministry of Environmental Conservation and Forestry, aims to tackle deforestation and encourage foreign investment in wood processing mills.
Please refer to the March 1, 2013 issue of your Madison’s Lumber Reporter for details about EUTR.
“The new law will shine a spotlight on the illegal logs that are leaving the country and will create more processing jobs,” says Jack Hurd, Asia Pacific region deputy director of The Nature Conservancy.
Despite having a forest coverage of as much as 48 per cent, Myanmar is only earning US$500 per ton of teak and hardwood, according to Clean Biz Asia April 2. Meanwhile, competitors like Malaysia benefits by US$20,000 per ton, thanks to the its wood-processing sector, says Clean Biz Asia.
According to the Union of Myanmar Federation of Chambers of Commerce and Industry, earnings from teak log exports for the year were almost US$284 million, while hardwood logs earned about $273 million.
Myanmar’s forest coverage was down to 24 per cent in 2008 from 51 per cent in 2005, and 57 per cent in 1962. The main causes of deforestation are excessive harvesting of trees, rampant illegal logging, increasing use of firewood, as well as Aa shifting cultivation system.
In addition, Under the Ministry of Forestry’s Annual Allowable Cut framework, production of teak will decline by 15 per cent in the 2012-13 financial year, while hardwood will fall by 20 per cent, Minister for Environmental Conservation and Forestry U Win Tun said at a planning meeting in October 2012.
While the Ministry did not provide export figures, it said teak production also fell 15 per cent in 2011-12, while hardwood production fell 20 per cent. Local news agencies in Myanmar reported recently that the country exported 371,000 metric tonnes of teak and 1.789 million metric tonnes of hardwood in 2011-12.
Myanmar produces about 283,000 cubic metres of teak and 1.98 million cubic metres of hardwood annually, according to Timber Design and Technology February 1. In addition, the country is also a major exporter of teak in the world, taking up 75 per cent of the global market. It ships teak to China, India, and other regional countries.
Canada Mortgage and Housing Corp said Friday total housing starts continued to be relatively stable in July. The federal agency estimates there were 17,993 actual starts in July, which gives a seasonally adjusted annual rate of 192,853 starts. That was slightly down from June’s adjusted annual rate of 193,797 starts.
The agency says the annual rate of urban starts decreased by 2.1 per cent in July to 173,042 units, as both single and multiple urban starts declined.
Single urban starts decreased by 5.5 per cent to 58,731 units on an annual basis in July while the multiple urban starts segment essentially held steady at 114,311 units.
July’s seasonally adjusted annual rate of urban starts rose in British Columbia and decreased in all other regions, including Atlantic Canada, Ontario, Quebec and the Prairies.
Meanwhile, contractors took out building permits worth $6.6 billion in June, down 10.3 per cent from May and the first decrease in six months, said Statistics Canada Wednesday. Despite this decline, the total value of building permits continued to trend upward.
After three consecutive monthly increases, the total value of permits in the residential sector declined 12.9 per cent to $4 billion in June, said StatsCan Wednesday. The value of residential building permits was down in nine provinces, led largely by Ontario, followed by Quebec and Alberta. Saskatchewan and the Northwest Territories showed the only gains in June.
Building permits for multi-family dwellings fell 18.8 per cent to $1.8 billion in June, following three consecutive monthly gains. Lower construction intentions for apartments and apartments-condominium projects in Ontario, Quebec, Alberta and Nova Scotia contributed to the decline in June. Decreases were registered in nine provinces, with Ontario posting the largest decline, followed by Quebec.
Construction intentions for single-family dwellings decreased 7.4 pe cent to $2.2 billion in June, following two consecutive monthly increases. Lower construction intentions were posted in seven provinces with Ontario, Alberta and Quebec accounting for most of the national decline.
North American hardwood lumber exports slowed in July due to summer holidays, Ramadan, as well as ample supplies in some countries, which kept many international buyers off the market, resulting in the usual seasonal slowdown, according to Weekly Hardwood Review Thursday.
Exporters found more price resistance when quoting new orders, particularly to China, where the spring spike in purchasing had elevated inventories.
Exporters believe underlying Chinese demand is still strong and that buyers are simply trying to hold off on purchasing long enough to force price reductions.
Hardwood Lumber Exports, North America
Despite the July slowdown, Chinese market growth has been impressive in 2013, said Weekly Hardwood Review.
Year-to-date US hardwood lumber exports to China through June were 20 per cent higher than last year, and Red Oak shipments were 47 per cent higher. Several contacts said Vietnam slowed in July—in part due to buyers’ expectations that prices normally fall off in the summer—while others say demand remained fairly strong.
US hardwood lumber exports to Southern Europe slowed in July, as summer holidays began. However, exports to the UK and Ireland were slightly better. While shipments to Germany were down 24 per cent through June, the economy is solid and business has since picked up. Several exporters and European buyers noted increased inquiries for post-holiday delivery, and some expressed guarded optimism about autumn.
All components of NAHB’s 55+ Housing Market Index showed major growth in the 2Q 2013, said the National Association of Home Builders Friday. Compared to 2Q 2012, both the single-family and the multifamily indices jumped 24 points: the single-family from 29 to 54 points, and the multifamily from 19 to 43 points.
US Housing Market Index: 2Q 2013
For the 55+ single-family index, presents sales climbed 24 points to 54, expected sales climbed 25 points to 60, and traffic of prospective buyers climbed 26 points to 48.
On the multifamily side, present sales rose 26 points to 44, expected sales rose 26 points to 46, and traffic of prospective buyers rose 19 points to 38. An index number above 50 indicates more builders view conditions as good than poor.
Wildfire season hit North America with full force this week.
Partial or full fire bans went into effect in British Columbia, Washington State, and Oregon this week. Collectively, the two largest fires in Oregon had burned nearly 50,000 acres (20,200 hectares) as of August 6, 2013, according to NASA Thursday.
As of 8 am Friday, the Salmon River Complex Fire in California had engulfed over 9,100 acres. The estimated containment date is still unknown as over 1,100 fire personnel enter day 10 of battling the blaze.
Around 50 structures remain threatened and the total cost of the fire to date is estimated at US$6.6 million, according to a US Forest Service’s press release Friday. That fire was 16 per cent contained.
While destructive to property and life, the 14,000-acre Black Forest wildfire in Colorado was relatively small for this year’s western wildfire season. According to the National Interagency Fire Center statistics, the West Fork Complex Fire in Montana burned 109,615 acres, the Colockum Tarps Fire in the southeast region of Washington is at 80,881 acres, and the Moore Creek Fire in Alaska is 157,748 acres.
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August 14, 2013
Federal legislation that would improve forest health and assist rural economies advanced Wednesday in the US House of Representatives. Two bills were combined; to reduce the threat of wildfire, and to increase timber harvest revenues to schools and other local services, and cleared the House Natural Resources Committee.
US Representative Scott Tipton, R-CO, is the sponsor of HR818, which sets priorities to reduce fuels in forests in order to reduce the risk of fire. Tipton’s bill directs the Forest Service to prioritize hazardous fuels reduction projects proposed by governors, affected counties and First Nations.
US Representative Steve Daines, R-MT, got two amendments attached to legislation intended during a House committee session on Wednesday.
Forest Service to Speed Timber Harvests
The other bill, HR1526, sponsored by US Representative Doc Hastings, R-WA, addresses the shortfall in county revenue for schools and critical services caused by lack of timber harvest. Daines is one of 18 co-sponsors. The bill would require the Forest Service to produce at least half the sustainable yield of timber each year and share 25 per cent of its revenues with local county governments. It would also streamline National Environmental Policy Act and Endangered Species Act analyses of projects.
The Restoring Healthy Forests Act requires the US Forest Service to manage its timber land in order to generate revenue for schools and counties.
Please see the July 12 issue of your Madison’s Lumber Reporter for background details.
To expedite locally based healthy forest projects, the Hastings-Tipton package builds on the positive streamlining procedures implemented under the bipartisan Healthy Forests Restoration Act of 2003.
“Our package would allow greater state and local involvement in wildfire prevention on federal lands in order to expedite hazardous fuels reduction projects and reduce litigation,” Tipton said.
In 2012, 9.3 million acres burned, while only about 200,000 acres of timber were harvested. Several of the most destructive fires were in Colorado. This year, fires again struck the state, including the Black Forest and Royal Gorge fires and numerous other blazes in the Arkansas and Rio Grande watersheds.
“Time is of the essence and we cannot afford to wait for more fires and more devastation before Congress acts,” Tipton said.
Legislation aimed specifically at boosting timber harvests on historic Oregon & California Railroad lands in Western Oregon was included in the sweeping federal forests bill.
Please see this week’s issue of Madison’s Timber Preview for more information.
One amendment to the Restoring Healthy Forests for Healthy Communities Act requires that the US Forest Service give priority to forests bordering First Nations reservations in need of hazardous fuels reduction, in accordance with the Tribal Forest Protection Act of 2004. In a press release, Daines said the agency has failed to follow the earlier legislation, which has put tribal lands at risk from wildfires starting on adjacent national forests.
The second would give the Forest Service more authority to deny appeals of projects it uses under its categorical exclusion rule. Categorical exclusions are intended for small-scale or repetitive actions that shouldn’t need full-scale agency analysis before approval.
“Without this provision, decisions on important, low-impact projects conducted by the Forest Service which were once completed in five to 10 days will continue to be delayed by at least 30 days, and in some cases, up to 145 days,” Daines said.
The bill passed the House Natural Resources Committee on Wednesday and is now headed for a vote before the full House of Representatives.
“As a fifth-generation Montanan, I know too well how devastating wildfires and the mismanagement of our national forests can be to our communities, our state’s economy and the health of our forests,” Daines wrote. “This bill will help create thousands of long-term jobs, protect our environment for future generations, allow tribes, local counties and states to have more input in forest management, and renew the federal government’s commitment to our rural counties.”
In Montana, money coming through the now-expired Secure Rural Schools funding from timber sales totaled US$22 million in 2011. That included US$1.8 million to Flathead County, US$5 million to Lincoln County and US$1 million to Mineral County.
“While much of our forests are suitable for harvesting, we still face community-threatening wildfires each summer and almost 10 per cent unemployment in Ravalli County,” Ravalli County Commissioner Greg Chilcott said of Daines’ amendments in an email. “There is much that can be done to better manage our forests, create jobs, and protect our communities from wildfires while assuring local governments have resources they need to best serve the public.”
This week’s issue of Madison’s Timber Preview examines the lastest moves in the US Congress to open up state and federal timberland in Oregon for harvesting. In particular, the ongoing O&C Lands debate is looked at.
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The Forestry Agency of Japan recently compiled the short-term forecast of the supply and demand for major timber for 3Q and 4Q 2013, according to the Japan Lumber Journal.
New housing starts for fiscal 2013 (April 2013 – March 2014) that were used as the base for the forecast were estimated to be 935,000 units, up by 11,000 units from 924,000 units, an estimate made 3 months ago, and also up by 4.7 per cent from the previous year.
The demand for the domestic lumber and imported lumber for 3Q (July – September) was forecast to increase from the same period in the previous year as the new housing start figures were strong. The demand for the domestic lumber and imported lumber for 4Q (October – December) was also forecast to be as firm as in 3Q and increase slightly from the same period in the previous year. It was projected that the demand situation for the timber would be good in response to the increase in the housing starts due to the rush demand before the increase in the consumption tax.
Japan Timber Forecast
With the demand forecast to be strong, the supply was also projected to increase from the previous year, says the Japan Lumber Journal. The supply of the North American lumber which is the major foreign lumber was projected to increase by 18.9 per cent in 3Q and by 4 per cent in 4Q. The supply of the European lumber was projected to increase by 11.9 per cent in 3Q and by 18.4 per cent in 4Q. The supply of Russian lumber products was also projected to increase by 10.1 per cent in 3Q and by 4 per cent in 4Q in response to the firm demand. However, as for the imported plywood for which the log situation in producing areas has been becoming increasingly severe, the increase in its supply was projected to be smaller than the domestic plywood.
Forest companies reporting financial results this week were International Forest Products, Tembec Inc, CanWel Building Materials, and Western Forest Products. Resolute Forest Products released preliminary results Thursday.
Resolute reported a net loss of $43 million in 2Q 2013 on sales of $1.1 billion, compared with a net loss of $17 million on sales of $1.2 billion one year ago.
Financial Results : 2Q
Western Forest Products Wednesday reported 2Q 2013 net income of $35.5 million on sales of $262.3 million, compared to a net income of $10.4 million on sales of $251.4 in 2Q last year.
Tembec, reporting it’s 3Q, said Thursday it’s consolidated sales were $399 million, as compared to $415 million in the same quarter a year ago. Tembec generated a net loss of $4 million in the June 2013 quarter, compared to a net loss of $5 million in the June 2012 quarter.
CanWel Building Materials Thursday reported revenues increased to $210 million, compared to $207 million in the same period in 2012. The increase in revenue relates primarily to higher sales of specialty and allied products and contribution from the acquisition of North American Wood Preservers LP. CanWel’s sales in the quarter were made up of 57 per cent of construction materials compared to 58 per cent in the same period in 2012, with the balance resulting from specialty and allied products.
The National Association of Realtors said Monday its Pending Homes Sales Index, based on contracts signed last month, decreased 0.4 per cent to 110.9. May’s index was revised down to 111.3 from a previously reported 112.3.
Compared to last year contracts were up 10.9 per cent.
Contracts were up in the West, but down in the Midwest and South. The index for the Northeast was unchanged.
Home Sales, Prices, US
Lean inventories of cheaper properties and mortgage rates that have climbed about 1 percentage point since early May are making it harder for some Americans to purchase houses.
Elsewhere, US home prices jumped 12.2 per cent in May compared with a year ago, the biggest annual gain since March 2006. Home prices gained 1 per cent on a seasonally adjusted basis, according to the S&P/Case Shiller composite index of 20 metropolitan areas.
All 20 cities rose on a yearly basis, led by a 24.5-per-cent surge in San Francisco. Two cities – Dallas and Denver – reached record levels, surpassing their peaks reached during the housing boom. It was the first time any city has racked up a new all-time high, the survey said.
Without seasonal adjustment, prices rose 2.4 per cent in May and on a national average they were back at their spring 2004 levels.
A tightening of inventory available for sale, fewer foreclosures, and buying from investors has helped push prices higher over the past year-and-a-half as the battered housing sector has gotten back on its feet.
But a potential hurdle has emerged recently in the form of higher mortgage rates, as borrowing costs have risen in the wake of the Federal Reserve’s plan to start winding down its economic stimulus later this year if the economy progresses as expected.
Still, rates remain low by historical standards and most economists do not expect them to derail the housing market.
May’s home price data likely did not capture the rise in rates as the contracts to purchase would have been signed before rates began increasing, Bank of America-Merrill Lynch wrote last week.
Meanwhile, The rental vacancy rate continues to decline as the percentage of Americans who own homes continues to slip.
US Census Bureau housing data for 2Q released this week shows rental vacancies dropped to 8.2 per cent from 8.6 per cent a year ago. Rental vacancies were 10.6 per cent and higher in 2009 and 2010.
Home ownership dipped to 65 per cent, from 65.5 per cent in 2Q 2012. The highest level in recent years was 69.2 per cent in 2004.
August 07, 2013
(Reprinted from Reed Construction Data, July 23)
Total Construction Spending and its Major Components
The US Census Bureau reported that total construction spending advanced 0.5 per cent in May to US$874.9 billion at a seasonally adjusted annual rate (SAAR), following a 0.1 per cent rise in April. Year-to-date not seasonally adjusted (NSA) construction spending was up 4.9 per cent compared to the same period in 2012. The numbers incorporate the Census Bureau’s annual benchmark revision of the construction spending data over the previous two years (back to January 2011).
Nonresidential building construction fell for the third month in a row, down 1.5 per cent to US$284.8 billion (SAAR) in May after declining 0.5 per cent in April. Year-to-date spending was 2.2 per cent (NSA) lower than the same period in 2012.
Total residential construction spending, which includes improvements, rose 1.2 per cent in May to US$328.6 billion (SAAR) after slipping 0.1 per cent in April. New residential construction spending, which excludes improvements, increased 0.8 per cent to US$203.8 billion after moving 1.5 per cent higher in April. Year-to-date NSA total residential construction spending was up 19.5 per cent, and new residential construction was up 35.9 per cent from the same period in 2012.
The Reed forecast assumes that the above risks are avoided. Total construction spending is forecast to grow 3.7 per cent this year, due to continued strong growth in new residential construction, and 9.4 per cent in 2014. The forecast assumes that nonresidential building construction is near the end of its retrenchment and will pick up strength soon, improving over the remainder of this year and throughout next year. Heavy engineering (non-building) construction is already back on the growth path. That improved growth should continue through next year and beyond. The main impediment to stronger performance in the sector is limited public funding from the federal government on down to the local level.
New Residential Construction Spending
New residential construction spending advanced 0.8 per cent on a seasonally adjusted (SA) basis in May after rising 1.5 per cent in April. May marked the third consecutive month that the rate of increase declined from the previous month’s rate. Meanwhile, new residential construction spending has increased for 20 months in a row. Year-to-date not seasonally adjusted (NSA) spending was up 35.9 per cent from the same period in 2012.
New single-family construction spending inched up 0.4 per cent in May after growing 1 per cent in April. New multifamily construction spending increased a healthy 2.4 per cent in May after soaring an even stronger 3.6 per cent in April. On a year-to-date NSA basis, single-family construction spending was up 34.5 per cent and multifamily spending was up 42.7 per cent from the same period in 2012.
Latest Figures and Outlook
Outlook for Residential Construction
The outlook for the housing market continues to be positive, in spite of recent slowing and higher interest rates. Severe weather in much of the country may have been behind this downturn. Housing prices continue their upward movement in much of the country. On a year-over-year basis the April 10-city and 20-city S&P/Case-Shiller® Home Price Indexes were up 11.6 per cent and 12.1 per cent, respectively. On a SA monthly basis, both indexes have increased for 15 consecutive months and prices for all 20 cities rose in each of the last five months.
On a year-over-year basis, the March Freddie Mac House Price Index was up 6.7 per cent, and the April FHFA purchase-only home price index was up 7.4 per cent. Rising home prices increase the equity homeowners have in their house. As a result, some underwater mortgages are raised above water, making it in the homeowners’ interest to make their mortgage payments and avoid foreclosure. With house prices rising, prospective homebuyers are more confident in proceeding with a purchase of a new or existing home. Lenders are also more willing to lend to homebuyers and homebuilders.
Mortgage rates have moved higher despite remarks by Federal Reserve Chairman Ben Bernanke that the Fed does not plan to reverse its purchase of mortgages and mortgage-backed securities anytime soon. Although the higher rates have hurt the refinance market, they are likely to push some reluctant potential homebuyers who may have been waiting for lower rates to enter the market or to proceed with a purchase before rates go even higher. Even with the recent rise in mortgage rates, they remain low by historical standards, keeping affordability high.
The Reed forecast is for new residential construction spending to increase 29.5 per cent this year and to increase 15.9 per cent in 2014.
Nonresidential Building Construction Spending
Nonresidential building construction spending dropped 1.5 per cent (SAAR) in May following a 0.5 per cent decline in April. On a year-to-date (NSA) nonresidential building construction spending was down 2.2 per cent. The numbers incorporate the Census Bureau’s annual benchmark revision of the construction spending data over the previous two years (back to January 2011).
“For lease” private projects spending slumped 1.3 per cent (SA) in May, its third consecutive monthly decline. In spite of the recent reduction in spending, May year-to-date NSA for lease spending was up 2.5 per cent over the same period in 2012. Lodging construction spending has been showing strength of late, increasing 1.3 per cent in May following a 5.2 per cent surge in April. Office construction spending decreased 0.6 per cent after plunging 4.2 per cent in April. Retail construction spending sank 2.5 per cent in May after advancing 0.6 per cent in April. On a year-to-date NSA basis, lodging spending was up 20.8 per cent, office construction spending was down 2.7 per cent, and retail construction spending was up 2.5 per cent compared to the same period in 2012.
Construction spending for institutional projects rose 0.6 per cent in May after slipping 0.2% in April. Year-to-date, NSA institutional spending was down 7.1 per cent from the same period in 2012. Only amusement/recreation construction spending fell for the month, down 1.8 per cent after increasing 1 per cent in April. However, on a year-to-date basis, all of the categories for the group were down from 2012.
Manufacturing construction spending, which was generally increasing for over two years, plummeted 8.1 per cent in May after decreasing 1.2 per cent in April. Further, the Census Bureau reported significant downward revisions in the spending data going back to 2011. The revisions put a damper on the positive news that year-to-date NSA manufacturing construction spending was 4.7 per cent higher than the same period in 2012.
The nonresidential construction forecast for 2013 is for a 1.8 per cent decrease in overall spending. The forecast for 2014 is for a gain of 7.4 per cent, with all groups contributing to growth.
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Lumber production by Canada’s sawmills decreased 4.6 per cent from April to 5,163.2 thousand cubic metres in May, said Statistics Canada Friday. Compared with May 2012, lumber production increased 8.1 per cent. Canadian sawmills shipped 4,903.3 thousand cubic metres of lumber in May, down 3.2 per cent from April.
US house prices rose 7.3 per cent in the year through May as buyers competed for a small supply of listings, according to the Federal Housing Finance Agency Tuesday. Prices increased 0.7 per cent on a seasonally adjusted basis from April, the FHFA said in a report from Washington.
The median selling price of a new home appreciated 7.4 per cent to US$249,700 last month, from US$232,600 in June 2012.
Purchases rose in three of four US regions, led by an 18.5 per cent surge in the Northeast. They climbed 13.8 per cent in the West and 10.9 per cent in the South. Demand dropped 11.8 per cent in the Midwest.
The supply of homes at the current sales rate was 3.9 months compared with 4.2 months in May. There were 161,000 new houses on the market at the end of June, up from 159,000 a month earlier.
Sales of new properties, which are tallied when purchase contracts are signed, are considered a more timely measure of the market than sales of previously owned dwellings, which are counted when a sale is final. New-home sales accounted for about 7 per cent of the residential market in 2012.
Low supplies helped push the median price of an existing home up 13.5 per cent to $214,200 last month from $188,800 a year earlier, the report showed.
US Home Sales, Prices, Mortgages
The FHFA’s report showed prices increased 15.8 per cent from a year earlier in the Pacific area, which includes California and Oregon. In the Mountain region, including Nevada and Arizona, the gain was 12.7 per cent. The East South Central area — including Kentucky and Alabama — had the smallest increase, at 2.7 per cent.
The FHFA index measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae and Freddie Mac. The gauge is 11.2 per cent below its April 2007 peak.
As of Thursday, the latest average interest on a 30-year fixed-rate loan is 4.31 per cent a year, according to Freddie Mac. That’s down from 4.51 per cent two weeks ago.
Still, current US mortgage rates are also up a full percentage point from where they stood back in January.
Home prices have been rising, boosting consumer wealth, and construction jobs have been aided by a relative shortage of homes for sale.
Many economists say modestly rising mortgage rates aren’t likely to stop the housing recovery. For one thing, mortgage rates are still historically low.
History suggests that moves in mortgage rates can exert an influence on home prices – in the opposite direction. But in some cases the damage isn’t very bad.
The concern is that the central bank will soon start to taper the pace of a bond-buying program aimed at lowering long-term interest rates and spurring economic growth.
Major North American lumber producers announcing 2Q results so far this yearwere West Fraser, Canfor, and Weyerhaeuser.
2Q 2013 Results
West Fraser Timber reported earnings July 17 of $109 million, on sales of $900 million, in 2Q 2013, compared to earnings of $24 million, on sales of $774 million for the same period last year.
Canfor Corporation Thursday reported net income of $110.3 million, on $843.2 million in sales, for 2Q 2013, compared to $2.6 million, on $685 in sales, for the 2Q last year.
For it’s part, Weyerhaeuser Friday reported net earnings of US$196 million, on sales of US$2.1 billion, for 2Q 2013, compared with earnings of US$$84 million, on net sales of US$1.8 billion, for 2Q 2012.
A Prince George lumber company sounded the fire alarms Monday, just as another local sawmill started rebuilding after a fire last year, according to the Prince George Citizen. Carrier Lumber, located southeast of the city, had an explosion at their planer mill Monday. Several volunteer fire departments responded to the call.
It’s not completely clear what happened Monday afternoon, but mill president Bill Kordyban said it appears the wood shavings and sawdust collection system was shut down due to a small fire.
Sawmill Fire, BC
“It was an explosion within the planer blower pipe,” said Kordyban. “It transports dry shavings down a 30-inch pipe away from the planer and into a cyclone in a small, separate building off to the side called the blower building, and that’s where the explosion happened. The building is clean so there was no secondary explosion, it was a primary explosion contained within the pipe and that’s all there was to the chain of events in this incident.”
The [dust collection] system had been shut down to extinguish a small fire within the planer equipment. These are common and minor in nature. Firefighters from the Buckhorn Volunteer Fire Department were on scene in April for one such small blaze.
An initial or primary explosion can disturb fine dust that has accumulated in areas such as rafters, which once airborne can cause a large explosion known as a secondary explosion.
In this case, said Kordyban, the fire seems to have not been extinguished and when the production system was restarted, it led to the explosion within the large pipe.
One worker injured Monday was taken to hospital with minor burns and released several hours later.
The explosion at Carrier Lumber happened the same day as Lakeland Mills in Prince George, the site of the second of the two deadly explosions last year, held an official groundbreaking ceremony for its new mill.