VANCOUVER, BC — Housing starts in the United States experienced a remarkable increase in November 2023, reaching a 1.56 million unit annualized pace, marking the highest reading since May and the second-best in a year and a half. This robust surge in housing starts is attributed to a persistent shortage of previously owned homes available for sale.
Economic Growth Fueled by Demand:
According to Bill Adams, Chief Economist at Comerica Bank in Dallas, the demand for American housing is now permanently higher than pre-pandemic levels. The shift towards spending more time at home has driven this change. Lower long-term interest rates are expected to lead builders to add more supply to the housing market to meet this sustained demand, ultimately contributing to economic growth.
Key Figures and Statistics:
- November 2023 total housing starts in the US spiked to 1.560 million units, a significant increase from the 1.359 million units reported in October 2023.
- This figure also represented a noteworthy +9% rise compared to the November 2022 rate of 1.427 million units.
- Building permits, a key indicator of future construction activity, showed a seasonal decline, down -2.5% to 1.460 million units from October’s rate of 1.498 million. Nevertheless, this number was over +4% higher than the November 2022 rate of 1.402 million.
Lumber Prices and Their Significance:
Lumber prices, particularly those of construction framing softwood lumber, serve as an important leading indicator for US housing activity, encompassing home building and sales. The price of Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) stood at US$414 mfbm in the week ending December 15, 2023, reflecting a +1% increase compared to the previous week. Over the course of a month, this price climbed by +3%, up from $403.
As the year-end holiday break neared, the US market for Western Spruce-Pine-Fir lumber remained reserved. While some preparatory winter buying was observed, it was characterized by smaller orders as customers opted for just enough material to last into 2024. The market appeared slightly undersupplied, but there was no sense of urgency from buyers as construction activity slowed seasonally.
Canadian Market Insights:
In Canada, sales of Western Spruce-Pine-Fir lumber continued to decrease as the holiday break approached. Producers scaled down operations for the holiday season, and demand remained flat to down as buyers took a step back. Customers in need of immediate materials found little trouble securing specific mixes and LTL (Less than Truckload) loads from secondary suppliers for quick shipment.
About Madison’s Lumber Prices:
Established in 1952, Madison’s Lumber Prices is a leading source for North American softwood lumber news, prices, industry insights, and industry contacts. The weekly Madison’s Lumber Reporter publishes current Canadian and US construction framing dimension lumber and panel wholesaler pricing information for 50 weeks a year, including access to historical pricing data.
For additional information, please visit Madison’s Lumber Prices.
Note: All figures and statistics are subject to change as the market evolves.