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Full-year 2022 US housing starts and new home sales data has been released and while the dampening effects of rising mortgage rates remain, the numbers for December show a slight uptick. In 2022 the US began building 1.55 million homes, just a -3% drop from full-year 2021. Single-family starts in 2022 totalled 1.01 million, down -10.6% from the previous year.
Total housing starts in the US for December 2022 were almost flat from the previous month, decreasing only -1.4% to 1.382 million units compared to the revised 1.401 million units reported for November, and dropped -22% from the December 2021 rate of 1.768 million.
Building permits were also essentially flat, down by -1.6%, at 1.330 million units from the November rate of 1.351 million. This is -30% below the December 2021 rate of 1.896 million. These will eventually become starts and will help to underpin residential construction.
While housing starts were down in full-year 2022, housing completions posted a +3.8% annual gain, rising to an estimated annual rate of 1.392 million housing units. Dropping from the historical highs seen in most of 2022, there were 1.712 million units under construction, 769,000 of those were single-family homes. This is still well above the historical record-high of 1.628 million total units that were under construction in 1973.
Benchmark Softwood Lumber Prices January 2023 & US Housing Starts Full-Year 2023
December starts of single-family housing, the largest share of the market and construction method which uses the most wood, rocketed up +11% to a rate of 909,000 units from November's 817,000 units. Single-family authorizations were at 730,000 units, which is -6.5% below the November figure of 781,000 units. Building permits are generally submitted two months before the home building is begun, so this data is as indicator of February construction activity.
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, after a very soft couple of months, in the week ending January 20, 2023, the price of benchmark softwood lumber item Western Spruce-Pine-Fir 2x4 #2&Btr KD (RL) was US$374 mfbm, which is up by +$4 or +1%, from the previous week when it was US$370 mfbm, said weekly forest products industry price guide newsletter Madison's Lumber Reporter. This is down by -$19, or -5%, from one month ago when it was $393.
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.
The U.S. Census Bureau and the US Department of Housing and Urban Development released January 26 new home sales and house price data. 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.
Also rising after struggling for the second half of last year, sales of new US single-family homes in the US increased for the third month in a row, at 616,000 units, which is up +2.3% from November's 602,000 and is a -26.6% drop compared to December 2021 when it was 839,000.
Only 6,000 new homes sold last November were below US$300,000.
At the sales pace in December it would take a lengthy 9 months to clear the supply of new houses on the market, down from 9.2 months in November. For full-year 2022 an estimated 644,000 new homes were sold, which is -16.4% below the 2021 figure of 771,000.
There were 461,000 new homes on the market at the end of last month, unchanged from November. Houses under construction accounted for 63.1% of the inventory, with homes yet to be built making up 21.5%.
Completed houses accounted for 15.4% of the inventory, well below a long-term average of 27%.
US NEW Home Sales December 2022 & Benchmark Softwood Lumber Prices January 2023
After seemingly relentless climbs, the median sales price in December dropped again, down by -3.7% to US$442,100, from US$459,100 in November, and is up +7.8% from one year ago.
As for those lumber prices, compared to the same week last year, when it was US$1,170 mfbm, the price of Western Spruce-Pine-Fir 2x4 #2&Btr KD (RL) for the week ending January 20, 2023 was down by -$796, or -68%. Compared to two years ago when it was $944, that week's price is down by -$570, or -60%.
Benchmark Dimension Softwood Lumber Prices: January 2023
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Source: Madison's Lumber Reporter