The U.S. Census Bureau and the US Department of Housing and Urban Development released October 26 new home sales and house price data for September 2021.
New home sales comprise 10% of real estate activity and are considered a leading housing market indicator as they are recorded when contracts are signed.
After slowing down in the summer, sales of new US single-family homes rocketed up by an astonishing +14%, while the median price of newly built houses increased by even more, compared to the previous month. There were 800,000 new US homes sold in September, which is up +14% from a significantly downwardly-corrected 702,000 in August, and is down -18% from 971,000 in September 2020.
At the sales pace in September it would take a regular 5.7 months to clear the supply of houses on the market, compared to 6.5 months in August.
The ratio of homes sold in September either still under construction or yet to be built was an astonishing 74%. Houses under construction made up 62.5% of the inventory, with homes yet to be built accounting for about 28%.
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.
Madison’s Benchmark Top-Six Softwood Lumber and Panel Prices: Monthly Averages
Looking at lumber prices, showing surprising strength in ongoing increases when usually lumber prices are dropping, in the week ending October 22, 2021, the price of Western S-P-F 2×4 #2&Btr KD (RL) was US$630 mfbm, which is up by a remarkable +$35, or +6%, from the previous week when it was $595. This price is up by +$142, or +29%, from one month ago when it was $488.
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
US Median New House Prices September and Benchmark Softwood Lumber Prices October: 2021
The median sales price shot up to US$408,800, from US$390,000 in August, which is up a remarkable +20%. Prices are now 45.5% above their 2006 peak. Sales continued to be concentrated in the $200,000-$749,000 price range.
House supply has lagged behind demand, as builders are constrained by high lumber prices as well as shortages of other building materials, household appliances, land, and labour.
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 Commodity Western Spruce-Pine-Fir Price: October 2021
