The U.S. Census Bureau and the US Department of Housing and Urban Development released July 26 new home sales and house price data. New home sales comprise 10% of real estate activity and are considered a leading housing market indicator as they are recorded when contracts are signed.
Benchmark Softwood Lumber Prices August and US NEW Home Sales July: 2021
After dropping somewhat in June, sales of new US single-family homes improved in July as the median price of newly built houses rose compared to previous months and compared to one year ago. There were 708,000 new homes on the market in July, which is up +1% from 676,000 in June. At the sales pace in July, it would take a usual 6.2 months to clear the supply of houses on the market, similar to the 6.3 months seen in June.
The median sales price rose to US$390,00, from US$361,800 in June. House supply has lagged behind demand, as builders are constrained by high lumber prices as well as shortages of other building materials, household appliances, land, and labour. The ratio of homes sold in July either still under construction or yet to be built was 75%, up from an incredible 77% in June.
Looking at lumber prices, continuing to correct downward somewhat, in the week ending August 20, 2021, the price of benchmark softwood lumber commodity Western S-P-F 2×4 #2&Btr KD (RL) was US$390 mfbm. This is down by -$49, or -11%, from the previous week when it was $439. That week’s price is down by -$234, or -38%, from one month ago when it was $624.
When compared to the same week last year, when it was $850, price for the week of August 20 is down by -$460, or -54%. Compared to two years’ ago when it was $346, this week’s price is up by +$44, or +13%.
STAY AHEAD of US home sales data by getting access to softwood lumber prices. Released every Friday for that week, since 1952 Madison’s Lumber Prices are 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.
US Median New House Prices July and Benchmark Softwood Lumber Prices August: 2021
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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Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages