Paul MacDonald

Some promising news on the U.S. housing front

After being in almost a free fall for the last several years, housing sales in the United States are on the upswing.
While things on the housing front are a long ways from recovery, this is still positive news for the Canadian forest industry and Canadian sawmills, who supply a good portion of American homebuilders with dimensional lumber.
The U.S. National Association of Realtors reports that for the first time in five years, existing-home sales have increased for four months in a row.
Existing home sales—including single-family, townhomes, condominiums and co-ops—rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008.
The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.
Lawrence Yun, NAR’s chief economist, said he is encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said.
Significantly, the monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.
“In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.
Interesting that a lack of inventory is now becoming a problem.
Clearly, the government incentives introduced by President Barack Obama are giving the housing market some traction.
The home building industry—and the Canadian forest industry—are not out of the woods yet by a long shot, but news like this is certainly positive when the industry has been hit by story after story of mill closures, and drops in lumber demand.