US Housing Starts January and Softwood Lumber Prices February: 2022

After relentless increases for the second half of last year, North America construction framing dimension softwood lumber prices reversed their rises during January 2022. Ongoing strong demand, however, served to prop prices up again at the beginning of February.

WSPF-SYP-ESPF-2x4 Softwood Lumber Prices-2 year-US Housing 1-Unit STARTS & PERMITS: JAN 2022

Home building activity slowed somewhat as harsh winter weather hit across the continent and supply chain issues plagued the construction industry. Long delays in materials deliveries caused problems as builders and contractors waited ever longer for wood previously ordered. Customers hesitated to make further orders because they had not yet received lumber already bought. Indeed, builders may be focussing on finishing existing projects rather than starting new ones, which could bode well for the approaching summer construction season.

* Madison’s Lumber Prices, weekly, are a good forecast indicator of US home builder’s current lumber buying activity ——> DETAILS

Due to these delays, and to stalled projects in freezing temperatures, new home building in the US for January 2022 dropped by -4.1% from December 2021, to a seasonally adjusted annual rate of 1.638 million units. This is almost flat, just +0.8%, above the same month one year ago when it was 1.625 million. Permits for future homebuilding in January were the highest since 2006, at 1.899 units, up just +0.7% from the previous month, when it was 1.885 million. This compares to 1.883 units in January 2021.

Benchmark Softwood Lumber Commodity Western Spruce-Pine-Fir Price: February 2022

Madison's Softwood Lumber Benchark green and KD Construction Framing Dimension Softwood Lumber and Panel Prices FEB 2022

Looking at lumber prices, reluctant customers held off buying more wood as long as possible, so in the week of February 4, 2022 the price of benchmark lumber item Western S-P-F 2×4 #2&Btr KD (RL) evened out, to US$1,220 mfbm compared to the previous week, said forest products industry price guide newsletter Madison’s Lumber Reporter.

That week’s price is up by +$43, or +4%, from one month ago when it was $1,178.

January starts of single-family housing, the largest share of the market and construction method which uses the most wood, continued the decreases of December 2021 when it was to 1.182 million, down by another -5.6% to 1.116 million annualized. January 2022 single-family permits, however, jumped by +6.8% compared to one year ago, when it was 1.128 million units. Building permits are generally submitted two months before the home building is begun, so this is an indication of good building activity looming in March.

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.

US Housing 1-Unit Starts & Permits January and Benchmark Softwood Lumber Prices February: 2022

WSPF-SYP-ESPF-2x4 Softwood Lumber Prices-2 year-US Housing 1-Unit STARTS & PERMITS: JAN 2022

Construction activity varied widely over regions; in the Northeast, housing starts rose overall, but single-family starts fell by nearly -26%. Meanwhile, in the West, both total housing starts and single-family starts increased by upwards of +15%. Starts declined overall in both the Midwest and South.

The supply of previously owned homes for sale was at record lows, indicating ongoing demand for new housing through this year.

The backlog of houses authorized for construction but not yet started continued to surpass all historical data last month, to a rate of 278,100 units, the highest on record by far. For their part, the number of one-family homes authorized for construction but not yet started climbed +5.6% to 151,000 in January, close to record levels over the past 15 years.

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.

When compared to the same week one year ago, of $960, the price of Western S-P-F 2×4 for the week of February 4, 2022 was up by +$260, or +27%. Compared to two years’ ago when it was $402, that week’s price was up by +$818, or +203%.

Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Historical Perspective

Madison's Softwood Lumber Benchark green and KD Construction Framing Dimension Softwood Lumber and Panel Prices FEB 2022

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