Housing, Lumber Trending Up

From the Forest Resources Association:
FRA Bulletin - January 4, 2010
01/04/10
Volume 12, Number 1

On December 23, the Commerce Department released a disappointing report on new home sales, registering an 11% decline in November sales from the robust October figure--oddly contrasting the previous day's news, from the National Association of Realtors, that sales of existing homes had risen by 7.4% over the same period.  One analyst offered the comforting observation that "new home sales figures are typically volatile."  Fix Housing First, the coalition that pressed successfully for renewal of the Homebuyers' Tax Credit, has pointed out that sales of existing homes stimulate building product sales, since new owners typically undertake renovations and additions.

In any case, on December 18, Forest2Market reported an increase in the volume of Southern yellow pine being purchased for construction, with both absolute volumes sold and prices rising through mid-November, which F2M attributes to builders' building inventory prior to the holidays, in anticipation of the extension of the Homebuyers' Tax Credit.  However, F2M also noted that sales of construction lumber declined after mid-November and expected that prices would fall "as the year winds to a close."