The U.S. Census Bureau and the US Department of Housing and Urban Development released April 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.
After climbing to November, sales of new US single-family homes fell again in March. However, the median price of newly built houses continued its relentless climb upward. There were 763,000 new homes on the market in March, which is down -8.6% from 835,,000 in February, and is down -12.6% from 873,000 in March 2021.
At the sales pace in March it would take a normal 6.4 months to clear the supply of houses on the market.
There were 407,000 new homes on the market, up from 392,000 units in February. Houses under construction made up 65.5% of the inventory, with homes yet to be built accounting for about 25.8%.
According to the S&P Case-Shiller Home Price Index — which tracks prices nationwide — home prices in 20 U.S. cities soared a record +20.2% in February from a year earlier. Nationally, prices surged +19.8%, the third-biggest increase in data going back 35 years.
The median sales price increased by +3.7% to US$436,700, from US$421,000 in February. The March price is up an enormous +21.4% from one year ago, when it was $359,600. 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.
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.
Only 14% of new home sales in March were priced below US$300,000. A year ago, it was 34%. Builders are trying to ramp up entry-level supply priced under US$300,000, but they still lag behind last year’s pace, meaning that new homes are likely a viable choice for fewer first-time home buyers.
Looking at lumber prices, dropping slightly from the previous week, for the week ending April 22, 2022 the price of benchmark softwood lumber item Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$1,060 mfbm, down -$36, or -3%, from the previous week when it was $1,096, said weekly forest products industry price guide newsletter Madison’s Lumber Reporter. That week’s price is down by -$323, or -23% from one month ago when it was $1,383.
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
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages
Encouraging US single-family construction activity kept momentum going for lumber sales, even as sales volumes were dropping. It seemed like the market could turn on a dime. The appetite for wood remains strong.
“Demographics remain a strong driver of housing demand, and as the market adjusts to deliver product at price points and formats that align with this demand, sales are likely to be bolstered,” said RCLCO Real Estate Consulting principal Kelly Mangold. “In particular, due to the shortage of construction labour, buyers may be more hesitant to purchase a fixer-upper, understanding that the cost and timeline of renovations may be extended, making a turn-key new construction home more appealing.”
US Median New House Prices March & Benchmark Softwood Lumber Prices April: 2022
Builder backlogs of projects awaiting construction remain elevated and indicate residential building will stay firm in coming months and contribute to economic growth.
When compared to the same week last year, when it was $1,330, for the week ending April 22, 2022 the price of Western Spruce-Pine-Fir 2×4 is down by -$270, or -20%. Compared to two years’ ago when it was US$336 mfbm, this price is up by +$724, or +215%.
Benchmark Dimension Softwood Lumber Prices: April 2022
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