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Madison’s: August US housing starts and September softwood lumber prices

Privately-owned U.S. housing starts in August were at a seasonally adjusted annual rate of 1,416,000, the Commerce Department said Thursday. This is -5% below the revised July estimate of 1,492,000, but is +3% above the August 2019 rate of 1,377,000. Total starts were up +3% year-over-year compared to Aug. 2019. The dip in housing starts was driven by a -25% decline in multifamily construction activity.

“With labour shortages and rising lumber costs compounding slowing activity, consumers can expect much higher prices for new homes over the next 12 months.” — George Ratiu, senior economist at Realtor.com

Single-family housing starts in August were at a rate of 1,021,000; this is +4% above the revised July figure of 981,000. Single family starts were up +12% year-over-year.

For the week ending Sept. 11, 2020, softwood lumber prices flattened or dropped for the first time in many months, with benchmark softwood lumber commodity item Western S-P-F 2×4 down -$6, or -0.6%, compared to the previous week, said Madison’s Lumber Reporter. Prices for this construction framing dimension softwood lumber item is up an incredible +$214, or +29% from one month ago, when it was U.S. $746 mfbm. Compared to mid-September 2019, this price is up an astonishing +$584, or +155%.

With the weekly price dropping for the first time in many months, compared to one-year-ago last week’s Western S-P-F 2×4 price rose by +$503, or +110%, relative to the one-year rolling average price of U.S. $457 mfbm and was up +$544, or +137%, compared to the two-year rolling average prices of U.S. $411 mfbm.