A huge disruption to transportation for most of November from the critical lumber producing basket of the British Columbia interior, euphemistically referred to as “sawmill country”, caused a supply crunch for wood products which the market is currently still working out.
Of all construction framing lumber in the US at any time, approximately 14% comes from BC, so such a big drop so suddenly is having a great impact on lumber prices.
This problem with deliveries is due to a series of very powerful storms and massive flooding through November, which completely destroyed all four highways and both rail lines in southern BC. For details on the damage please go here: https://madisonsreport.com/2021/12/01/more-floods-british-columbia-nov-2021/
Meanwhile, US home construction activity is very strong for this time of year. Total housing starts in the US for November 2021 soared by almost +12% from October, to a seasonally adjusted annual rate of 1.679 million units. This is an +8.3% improvement from the same month one year ago, when it was 1.551 million. For their part, November permits for future homebuilding rose to 1.712 units, a +3.6% gain from the previous month, when it was 1.653 million. November 2021 permits are up almost +1% compared to one year ago, when it was 1.696 million.
November starts of single-family housing, the largest share of the market and construction method which uses the most wood, was 1.173 million annualized, an increase of more than +11% compared to October, when it was 1.054 million. Building permits are generally submitted two months before the home building is begun, so it’s quite unusual for this metric to be rising in November. Normally, not many builders want to break ground on a new house in January. Last year was different and 2021 is following suit; November 2021 single-family permits grew by almost +3%, at 1.103 million units, compared to October when it was 1.074 million units.
Shrewd investors know that construction framing softwood lumber prices are a good leading indicator for US housing activity, including home building and home sales. Don’t miss out, get lumber price data updates directly to your desktop every Friday morning.
Benchmark Softwood Lumber Commodity Western Spruce-Pine-Fir Price: December 2021
Looking at lumber prices, steadily rising at a time of year when demand is usually low, for the week of December 10, 2021 the price of benchmark lumber item Western S-P-F 2×4 #2&Btr KD (RL) rose by +$40, or +6%, to US$750 mfbm, from the previous week when it was US$710, said weekly lumber industry price guide Madison’s Lumber Reporter. That week’s price was up by +$121, or +19%, from one month ago when it was $629.
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.
* Madison’s Lumber Prices, weekly, are a good forecast indicator of US home builder’s current lumber buying activity ——> DETAILS
US Housing 1-Unit Starts & Permits November and Benchmark Softwood Lumber Prices December: 2021
When compared to the same week one year ago, of $744, the price of Western S-P-F 2×4 for the week of December 10, 2021 was up by +$6, or +1%. Compared to two years’ ago when it was $394, that week’s price was up by +$356, or +90%.
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Historical Perspective
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