Fast on the heels of sharply-upward US existing home sales data earlier this week, US new home sales for August are also up significantly. Please see details of existing home sales release here: https://madisonsreport.com/2020/09/22/u-s-house-prices-hit-record-high-as-existing-home-sales-jump-to-14-year-peak/
Sales of new US single-family homes increased to their highest level in nearly 14 years in August, suggesting the housing market continued to gain momentum. The Commerce Department said on Thursday new home sales rose +5% to a seasonally adjusted annual rate of 1.011 million units last month, the highest level since September 2006. New home sales are counted at the signing of a contract, making them a leading housing market indicator. New home sales are up +43.2% from August 2019.
July’s sales pace was revised upward to 965,000 units from the previously reported 901,000 units.
The median new house price fell -4.3% to US$312,800 in August from a year ago. New home sales last month were concentrated in the US$200,000 to US$499,000 price range.
Benchmark Softwood Lumber Prices Sept 2020 & US NEW Home Sales August 2020
There were 282,000 new homes on the market in the US last month, down from 291,000 in July. At August’s sales pace it would take 3.3 months to clear the supply of houses on the market, down from 3.6 months in July. About 71% of the homes sold last month were either under construction or yet to be built.
“The August figure is the first reading above 1 million since 2006, so both new and existing home sales registered their best results since 2006 in August.” — Stephen Stanley, chief economist at Amherst Pierpont.
Benchmark Softwood Lumber Prices: September 2020
Flattening out after phenomenal rises in the past few months, the price of benchmark North American construction framing lumber item Western Spruce-Pine-Fir KD 2×4 #2&Btr (RL) last week was US$960 mfbm (net FOB sawmill), unchanged from the previous week. Last week’s price is +$110, or +13%, more than it was one month ago, and compared to one year ago, this price is up by an astonishing +$578, or +151%.
Softwood Lumber Prices as Indicator of US Home Building
Compared to historical trend, last week’s WSPF 2×4 #2&Btr price is up +$491, or +105%, relative to the 1-year rolling average price of US$469 mfbm, and is up +$544, or +131%, relative to the 2-year rolling average price of US$416 mfbm.
Historical Softwood Lumber Prices: Current vs Highs & Lows
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.
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