The unprecedented turned to the frankly surreal last week as Canada placed retaliatory duties on a wide range of US imports, including wood and paper products. The latest trade data, meanwhile, shows quite a glowing picture of product sales across the Canada-US border for 1Q 2018.
Current Softwood Lumber Prices Compared to Recent and Historical Highs
The recently-entrenched transportation and logistics issues are slowly getting worked through in the North American forestry supply chain, and now both CN Rail and CP Rail have announced the addition of rail cars for grain and wood, and engines, as well as new hiring to handle this increase in product shipments.
The below table is a comparison of June 2017 and June 2018 prices for benchmark dimension softwood lumber 2×4 prices compared to historical highs of 2004/05:
Demand from the US, meanwhile, is roaring with much more intensity than anyone had anticipated one year ago.
This week, CoreLogic reported that US home equity jumped +13.3% in 1Q 2018 compared from one year earlier. For the average borrower, that translates to US$16,300 in additional home equity gained during the year, or a collective US$1.01 trillion. That is the biggest gain in four years.
For January to March 2018, 84,000 borrowers came up from underwater, regaining equity. The negative equity rate fell -21% from a year earlier, when just over 3 million borrowers were underwater. Negative equity peaked in 2009 at 26% of all mortgaged properties.
Gains in home equity are likely fuelling the boom in home remodelling, said CoreLogic. They are not, however, pushing homeowners to list their homes for sale, because trading up is so expensive and the supply of homes for sale is so lean.
Elsewhere, the US national housing inventory fell -6% annually in May, but was up +6% compared to the previous month, said Realtor.com also this week. The median list price grew by +8% year-over-year for the third consecutive month.