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Madison’s: US housing starts in March flew up, driving strong lumber prices in April

This year started off with a very harsh winter, which kept construction and building activity down in January and February. March housing starts across North America show a significant rebound – something Madison’s expected, due to a big jump in permits in the January data. Usually it takes two months for new housing authorizations to actually break ground, so these increases in March housing starts should be no surprise. Compared to March 2020, total residential starts in the U.S. last month shot up by +37% to a 1.74 million annualized rate, from 1.27 in the same month one year ago. Surpassing even the sharp rises in February, permits for future homebuilding increased spectacularly compared to one year ago, up by +30% to a rate of 1.77 million units last month compared to March 2020 when it was 1.36 million.

March starts of single-family housing, the largest share of the market and construction method which uses the most wood, flew up by +37% compared to March 2020, at 1.24 million. Once again providing good indication for an increase in near-term future home building, single-family permits, meanwhile, were at 1.2 million, a significant jump of +36% compared to the same month last year.

Shrewd investors know that construction framing softwood lumber prices are a good leading indicator for U.S. housing activity, including home building and home sales. Don’t miss out, get lumber price data updates directly to your desktop every Friday morning.

U.S. housing total and 1-unit starts in March and benchmark softwood lumber prices in April 2021.

As for lumber prices, after reaching the seemingly unbelievable level of US$1,060, in the week ending April 2, 2021, the wholesaler price of benchmark softwood lumber commodity item Western S-P-F KD 2×4 #2&Btr was US$1,130 mfbm for the week ending April 9. This is up by +$70, or +6%, from the previous week.

That week’s price is up by +$90, or +9%, from one month ago when it was $1,040.

Compared to the price one-year-ago, when it was US$310 mfbm, the benchmark lumber price for the week ending April 9 is up by +$820, or +265%. Compared to two years’ ago when it was $348, that week’s price is up by +$782, or +225%.

Benchmark softwood lumber commodity Western Spruce-Pine-Fir price: April 2021.

Stay ahead of U.S. 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 U.S. and Canadian home building materials.

Madison’s Lumber Prices, weekly, are a good forecast indicator of U.S. home builder’s current lumber buying activity.