Existing home sales rise
Existing-home sales increased in October to their strongest pace since earlier this summer, but continual supply shortages led to fewer closings on an annual basis for the second straight month, according to the National Association of Realtors.
The rise in sales report from the NAR shortly follows a report on rising residential construction metrics from the Dept. of Commerce.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 2.0% to a seasonally adjusted annual rate of 5.48 million in October from a downwardly revised 5.37 million in September. After last month's increase, sales are at their strongest pace since June (5.51 million), but still remain 0.9% below a year ago.
NAR Chief Economist Lawrence Yun says sales activity in October picked up for the second straight month, with increases in all four major regions. "Job growth in most of the country continues to carry on at a robust level and is starting to slowly push up wages, which is in turn giving households added assurance that now is a good time to buy a home," he said. "While the housing market gained a little more momentum last month, sales are still below year ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated."
Added Yun, "The residual effects on sales from Hurricanes Harvey and Irma are still seen in parts of Texas and Florida. However, sales should completely bounce back to their pre-storm levels by the end of the year, as demand for buying in these areas was very strong before the storms."
The median existing-home price for all housing types in October was $247,000, up 5.5% from October 2016 ($234,100). October's price increase marks the 68th straight month of year-over-year gains.
Total housing inventory at the end of October decreased 3.2% to 1.80 million existing homes available for sale, and is now 10.4% lower than a year ago (2.01 million) and has fallen year-over-year for 29 consecutive months. Unsold inventory is at a 3.9-month supply at the current sales pace, which is down from 4.4 months a year ago.
Properties typically stayed on the market for 34 days in October, which is unchanged from last month and down from 41 days a year ago. Forty-seven% of homes sold in October were on the market for less than a month.
Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Nov. 17, 2017.
Western: regional species perimeter foundation
Southern: regional species slab construction
Crow's Market Recap: A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow's Weekly Market Report.
SPF sales slowed, eroding some order files while other mills reported selling a little more than a week’s production. Despite the lackluster pace, western mills sold at higher price levels. Eastern dimension prices were flat to up modestly.
- Typical seasonal influences held back Southern Pine sales, but activity was solid. Yards regulated inventories closely, balancing purchases with sales. Producers continued to hear from buyers looking for an alternative to high priced and thinly supplied SPF.
- Most Coastal species lumber prices held at prior levels or dropped moderately. Those most influenced by SPF pricing and supplies remained firm. Mills noted good liquidity across most reported items despite a cautious approach from buyers.
- Inland lumber demand was reported to be strong; most producers noted order files reaching at least a week further out than usual. Prices for #2&Btr were solid, with the exception of Hem-Fir 2×8, which ranged fairly widely among producers.
- Stud demand diminished, prompting traders to perceive a ceiling on some price levels established in the current cycle. Traders expressed the opinion that trading during Thanksgiving week would likely slow further.
- Prices were reported to be unchanged for Radiata Pine industrials.
- Ponderosa Pine industrial lumber supplies were reported to be tight, causing buyers some concerns. Most major users were able to fill their needs by taking smaller volumes in shorter buying cycles, finding it difficult to source material in their usual volumes. In boards, millwork plants searched hard for Ponderosa Pine Commons, especially #3 and #4 Commons. Finding it in sufficient volumes was reported to be difficult.
- Among other 4/4 boards, changes of note were reported in ESLP Commons.
- Market activity in Western Red Cedar continued to resemble what usually occurs in November as the Thanksgiving holiday approaches. Buyers filled in inventories with mixed truckload and carload volumes.
The question surrounding OSB markets involves whether or not stabilization is near. Again, prices fell hard this week, leaving buyers unwilling to own any more panel than needed. The pipeline needs wood; however, and buyers are chasing orders, wondering when loads will arrive.
- Southern Pine rated sheathing prices continued to peel back as producers lowered quotes to keep some distance between lead times and production. Rated sheathing order files ranged from the week of November 20 out to Dec. 4.
- Downward price pressure persisted in Western Fir plywood. Buyers received numerous phone calls from mills looking to sell quick shipping volumes. Deeper discounts did entice buyers to purchase more volume while other producers chose to “grind it out” by limiting the depth of price cuts.
- Very little changed in the Canadian plywood market this week, as it maintained its strength and stability. Activity was steady, albeit mellow, through most provinces. The emphasis for producers centered on moving order file. Pricing is sideways from last week.
- Producers of particleboard and MDF experienced much of the same kind of week they have over the past month. Some reported being a bit busier, as customers tried to check off their lists prior to the holiday week. Prices for both MDF and particleboard held.
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