A dramatic drop in multi-family starts the previous month brought total housing starts for the US in May down significantly. The latest data release, for June, shows a bounce back in multi-family starts, which was enough to drive total housing starts back up.
The Madison’s Lumber Prices Index for the week ending July 12, 2024 was US$369 mfbm. This is down by -2%, or -$11, from the previous week when it was US$380.
For information regarding the construction of this Index (species mix, weighed averages) please go here: https://madisonsreport.com/madisons-lumber-prices-index-a-powerful-tool-for-data-driven-decision-making/
Total US housing starts in June were 1.36 million units, up +3% from the upwardly-revised 1.31 million units in May, and down more than -4% from June 2023 when it was 1.42 million units.
A forward-looking measure of housing construction, building permits rose +3% month over month to 1.45 million units, from 1.40 million in May, and fell -3% compared to June 2023 when it was 1.50 million.
The number of houses approved for construction that were yet to be started increased +1.8% to 277,000 units.
The single-family homebuilding backlog rose +0.7% to 140,00 units.
Single-family housing starts, which account for the bulk of homebuilding, in June fell more than -2% compared to May, at a seasonally adjusted annual rate of 980,000 units, from 1.0 million units, however rose +5.4% compared to June 2023 when it was 930,000 units.
Single-family permits dropped more than -2% from May’s 956,000 units, to a rate of 934,000 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.
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Said Lisa Sturtevant, chief economist at Bright MLS, “A slowdown in apartment construction is not surprising. In 2023, there were record numbers of apartments delivered in some markets across the US, leading developers to pull back on bringing new units to the market. Last year, rents in some markets fell and property managers were offering rent and other concessions to attract renters.”
First American deputy chief economist Odeta Kushi noted a “bright spot” in the June report – namely, the fact that the sales expectations sub-index ticked upwards, indicating that homebuilder sentiment is likely to improve if mortgage rates fall by the end of the year.
“This could signal that the bottom for single-family starts is near,” detailed Kushi
Madison’s Benchmark Softwood Dimension Lumber Prices: JULY 2024 Compared to Historical Highs and Lows
It is important to note that year-to-date new housing construction is actually up this year compared to 2023. For the first six months of 2024 single-family starts are up +16%, to 521,800 units (not seasonally-adjusted), from 449,400 units in the same time last year. Likewise, single-family permits for January – June this year are up +13%, to 511,500 units, compared to 453,800 units for the same time in 2023.
Looking at lumber prices, in the week ending July 12, 2024 the price of benchmark softwood lumber item Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was US$332 mfbm. That week’s price is down -$14, or -4%, from one month ago when it was $346, according to the latest data from Madison’s Lumber Reporter. That week’s price is down -$14, or -4%, from one month ago when it was $346.
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 Reporter Weekly Summary: JULY 12, 2024
Framing Lumber:
The post-holiday litmus test of improving demand was a resounding dud. Prices of dimension and studs continued to sputter while that of panels showed further weakness.
KEY LUMBER PRICES AND MARKET CONDITIONS TAKE-AWAYS:
- Commodity prices remained conspicuously cheap across all products.
- Wide dimension was the only remotely profitable group.
- Buyers had a prevailing and reinforced expectation of quick truck shipments at a discount.
- Sawmill asking prices a mixed bag.
- Downside momentum abating due to persistently low numbers, general fatigue, and less Euro wood coming into Eastern ports.
- Too many suppliers competing for limited business.
- Discounted plywood and OSB material flowed into US markets.
Madison’s Lumber Prices Index july & US Single-family Starts, Permits june: 2024
The completions rate for that single-family housing increased almost +2% from May to 1.04 million units in June.
Overall housing completions jumped +10% to a rate of 1.71 million units, the highest level since January 2007.
The number of housing units under construction fell -1.5% to a rate of 1.56 million units, the lowest level since January 2022.
The inventory of single-family housing under construction dropped -1.3% to a rate of 668,000 units.
As for those lumber prices, compared to the same week last year, when it was US$458 mfbm, the price of Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) for the week ending July 12, 2024 was down -$90, or -21%. Compared to two years ago when it was $630, that week’s price is down -$284, or -45%.
Madison’s Lumber Prices, weekly, are a good forecast indicator of US home builder’s current lumber buying activity ——> DETAILS
Madison’s Western S-P-F 2×4 Lumber Prices: July 2024
As for those lumber prices, compared to the same week last year, when it was US$458 mfbm, the price of Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) for the week ending July 12, 2024 was down -$90, or -21%.
Compared to two years ago when it was $630, that week’s price is down -$284, or -45%.