Into the month of March, lumber industry players hoped a balance of supply and demand had been reached, so price volatility settles down and true volumes of lumber are sold this spring.
The inventory of homes on the market continued extremely tight, as many multiples of buyers showed interest in each single listing.
Thus as spring 2022 comes on, construction activity is expected to once again be quite high. The broken highways in British Columbia are being bridged as quickly as possible but actual reconstruction will not commence until better weather arrives. Meanwhile, transportation issues throughout North American continued to frustrate lumber customers and sellers alike.
US housing starts in February were up, indeed reaching highs not seen since mid-2006, however building permits were down compared to the previous month.
Total housing starts in the US for February 2022 increased by +6.8% from January, to a seasonally adjusted annual rate of 1.769 million units. This is an +22.3% improvement from the same month one year ago, when it was 1.447 million.
Meanwhile, February permits for future homebuilding fell slightly, to 1.859 units, down -1.9% from the previous month, when it was 1.895 million. February 2021 permits are up +7.7% compared to one year ago, when it was 1.726 million.
The backlog of houses authorized for construction but not yet started continued to stay very high compared to historical, at 152,000 units in February 2022.
After dropping last month, February starts of single-family housing, the largest share of the market and construction method which uses the most wood, was 1.215 million annualized, up by +5.7% compared to January, when it was 1.150 million. Building permits are generally submitted two months before the home building is begun, so the expectation is that April single-family starts will be strong. February single-family starts are up a whopping +12% compared to one year ago when they were 1.069 million units.
Looking at lumber prices, ongoing strong demand coupled with frustrating delivery delays served to keep sales hot and prices high. In the week ending March 11, 2022 the price of benchmark lumber item Western S-P-F 2×4 #2&Btr KD (RL) was stabilizing, staying flat compared to the previous week at US$1,400 mfbm, said forest products industry price guide newsletter Madison’s Lumber Reporter.
That week’s price is up by +$118, or +9%, from one month ago when it was $1,283 and is up by +$360, or +35%, from one year ago when it was $1,283.
Benchmark Softwood Lumber Commodity Western Spruce-Pine-Fir Price: March 2022
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US Housing 1-Unit Starts & Permits February & Benchmark Softwood Lumber Prices March: 2022
Looking at the US housing market, the preliminary national NAHB/Wells Fargo Housing Market Index (HMI) for March was 79, down from a revised value of 81 for February. After hitting a recent low of 75 in August 2021, the HMI peaked at 84 in December 2021. The HMI is a predictor of housing starts during the next six months.
“The U.S. real estate market was flying high pre-COVID,” said Chuck Vander Stelt, real estate agent and founder of Quadwalls. “The arrival of the pandemic engaged the afterburners.”
As of February, there were 799,000 single-family homes under construction, a +22% gain from a year ago, and there were 770,000 multifamily units under construction, a +15% increase from December 2020.
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
When compared to the same week two years’ ago when it was $446, for the week ending March 11, 2022 the price of benchmark lumber item Western S-P-F 2×4 #2&Btr KD (RL) was up by +$954, or +214%.
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Historical Perspective
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Established in 1952, Madison’s Lumber Prices is your premiere source for North American softwood lumber news, prices, industry insight, and industry contacts. The weekly Madison’s Lumber Reporter publishes current Canadian and US construction framing dimension lumber and panel wholesaler pricing information 50 weeks a year and access to historical pricing as well.