US House Prices vs Construction Framing Softwood Lumber Prices: 4Q 2019 and Jan 2020

Home-price growth in the US accelerated in November 2019, in the latest sign the home-sales market is picking up steam after a slow start to 2019. The S&P CoreLogic Case-Shiller National Home Price Index rose +3.5% in the 12 months to November, up from a +3.2% annual pace the prior month.
National home price gains coincide with an increase in buying activity. December was the strongest month for existing home sales last year, with purchases increasing 3.6%.

After remaining flat at US$402 mfbm for several weeks, for the week ending January 31, 2020, the price of benchmark North American construction framing lumber item Western Spruce-Pine-Fir KD 2×4 #2&Btr (RL) popped up +$6, or +1.5%, to US$408 mfbm, compared to the previous week. This week’s price is +$10, or +1.5%, more than it was one month ago, and compared to one year ago, this price is up by +$4.

Benchmark Softwood Lumber Prices Jan 2020 vs US AVERAGE House Price 4Q 2019

It is important to note that different softwood lumber commodities are used in multi-family construction, compared to the benchmark items used for single-family.
For example; condominium and apartment building codes require more 2×6 sizes than 2×4, in studs as well as dimension, and also 10’ lengths are required (to accommodate the higher ceilings). Madison’s has been tracking this shift closely since it became apparent in the US house-for-sale and house-price data last year.

See our previous story on this fascinating subject:

The median home value in the United States is US$244,054. United States home values have gone up +3.7% over the past year and Zillow predicts they will rise +2.8% within the next year. The median price of homes currently listed in the United States is US$282,000 while the median price of homes that sold is US$236,900.

Benchmark Softwood Lumber Prices Jan 2020 vs US MEDIAN House Price 4Q 2019

Compared to historical trend, this week’s WSPF 2×4 #2&Btr price is up +$32, or +8.5%, relative to the 1-year rolling average price of US$376 mfbm, but is down -$25, or -6%, relative to the 2-year rolling average price of US$433 mfbm. This week’s price is up +$33, or +9% relative to the 5-year rolling average price of US$375 mfbm.

Madison’s Lumber Reporter publishes this week’s North America softwood lumber price list, accessed by subscribers via login, Friday morning (today). . US house price data for 4Q 2019 was released this week, as usual in the third week of each month.