It has recently been forecasted by the Western Wood Products Association that U. S. demand for lumber will drop almost 14.4% in 2009 from last year’s demand. This forecast is based on the expectation that housing starts in 2009 will total just 803,000, the lowest level since WW2. Home building consumes about 45% of all lumber used each year in the U. S.
On Thursday, January 22nd 2009, this forecast seemed to be that much more solidified when it was announced that housing starts fell 15.5% to a seasonally adjusted annual rate of 550,000 units, the lowest on record. That is the biggest percentage drop since January of 2007, when housing starts fell 16.2%. This figure was sharply below what analyst’s had expected, which was an annual rate of 610,000.
New building permits, which tend to give a sense of future home construction, dropped 10.7% to 549,000, also a historic low. This was also way below what analyst’s had expected, which was 610,000 new permits.
For all of 2008, housing starts fell 33.3%, the biggest decline since 1974, while permits declined 36.2%, also the largest fall since 1974. This seems to be telling us that we probably have not seen the bottom in housing starts. This means that builders will continue to scale back construction in hopes of bringing the housing market back to some form of equilibrium. Let’s hope that this storm dissipates sometime in 2009 so we can put our talents and tools back to use to build the American consumer the best homes possible! Stay tuned for more research!
I am seeing more lumber sales at places like Home Depot and Menards, but you got to get there quick or all you get are scraps. You guys should alert viewers to big chain store sales too!