New-home purchases account for about 10% of the market and are calculated when contracts are signed. They are considered a timely barometer of the current real estate market.
At a very unusual time of year, not when folks normally want to be preparing to move, sales of new single-family houses in the US for January 2021 were at a seasonally adjusted annual rate of 923,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.
This is +4.3% above the revised December rate of 885,000 and is +19.3% above the January 2020 estimate of 774,000.
Softwood lumber prices jumped by a historic +73% on a year-on-year basis in January 2021.
There were 307,000 new homes on the market last month, up from 299,000 in December. At January’s sales pace it would take 4 months to clear the supply of houses on the market, down from 4.1 months in December. About 72.4% of homes sold last month were either under construction or yet to be built.
The number of properties sold for which construction hadn’t yet started increased to 277,000 from 256,000 in the prior month, while the number of homes for sale rose to 302,000, the most since May 2020.
The median sales price of new houses sold in January 2021 was US$346,400, which is up +5.3% from December 2020.
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages
The US National Association of Realtors reported last week that the supply of previously owned homes available for sale plunged to a record low in January. That has pushed buyers toward the market for new homes. Demand for housing is being driven by Americans seeking more space for home offices and schooling as the year-long coronavirus pandemic drags on.
Builder backlogs of projects awaiting construction remain elevated and indicate residential building will stay firm in coming months and contribute to economic growth.
Benchmark Softwood Lumber Price Western Spruce-Pine-Fir 2×4: 2018 – 2021
For the week ending February 19, 2021, the price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr climbed +$20, or +3%, to US$1,012 mfbm, from $992 the previous week, said Madison’s Lumber Reporter. That week’s price is +$56, or +6%, more than one month ago when it was $926.
Madison’s Lumber Reporter
Compared to the price one-year-ago, of US$440 mfbm, last week benchmark softwood lumber item Western S-P-F KD 2×4 #2&Btr was selling for US$1,012 mfbm which is +$572, or +130% more.
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages
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 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. Don’t miss out, get lumber price data updates directly to your desktop every Friday morning: https://madisonsreport.com/subscribe/