Softwood Lumber and US Housing Market: 2020

Softwood Lumber and US Housing Market: 2020

The start of a new year, not to mention new decade, always heralds annual wrap-ups and predictions for the coming year. The end of last year did bring some clarity to several economics questions that had proved murky since mid-2018.

WSPF-SYP-ESPF-2x4-Lumber-Price vs US-House Prices: Average 2016-2019
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For their part, construction framing softwood lumber prices ended 2019 generally even compared to the previous week, suggesting that producers and customers had struck a good supply-demand balance in the waning weeks of the year. Log supplies at sawmills were ample as producers were booking lumber manufacturing into the first week of January on some specialty items.

Softwood lumber suppliers were able to hold prices firm by taking strategic downtime thus limiting supply during the usually slower time of year for construction.

Madison's Weekly Movers & Shakers Softwood Lumber and Panel Prices Chart DEC 19
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For it’s part, the close of US home building for 2019 shows improvement over the previous year and few years. Says Julia Falcon in US Housing Wire Jan 6, there were 6.8 million single-family housing starts between 2010 and 2019, which included 1.53 million custom home building starts, 827,000 townhouses starts (single-family attached) and 300,000 single-family built-for-rent starts, according to the National Association of Home Builders.

WSPF-SYP-ESPF-2x4-Lumber-Price vs US-House Prices: Median 2016-2019
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Looking ahead to this year, new data from Zillow suggests that southern markets are actually expected to outperform other national markets this year. In terms of multifamily real estate, there were 3.1 million starts in the last decade. Overall, the multifamily sector peaked in 2015, then leveled off as time went on, NAHB said. Throughout the decade, there were approximately 150 million remodeling projects. The total cost? US$1.5 trillion.

Madison's Historical Softwood Dimension Lumber Price Comparison Table DEC 2019
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