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Sustained strong construction activity keeps log sales volumes high: Madison’s

Driven by continued strong demand for real building projects, for the week of January 21, 2021 the price of benchmark lumber item Western S-P-F 2×4 #2&Btr KD (RL) was US$1,220 mfbm, which is up by +$50, or +4%, from the previous week when it was $1,170. That week’s price is up by +$417, or +52 from one month ago when it was $803.

An upward bump in U.S. housing starts, again unusual for the season, kept the pressure on for customers to order the dimension lumber building materials they knew they would need for the looming spring construction season.

New home building in the U.S. for December 2021 exceeded the historical trend for the time of year. Indeed, total housing starts in the U.S. increased by +1.4% from November 2021, to a seasonally adjusted annual rate of 1.702 million units. This is an +2.5% improvement from the same month one year ago, when it was 1.661 million. Meanwhile, December permits for future homebuilding rose to 1.873 units, a whopping +9.1% gain from the previous month, when it was 1.717 million. December 2021 permits are up +6.7% compared to one year ago, when it was 1.106 million.

The backlog of houses authorized for construction but not yet started shot up +1.1% to a rate of 270,000 units last month, the highest on record.