With the U.S. economy and employment growing robustly in 2021 and 2022, interest rates remaining low by historical standards, many of the supply-side constraints that held back housing over the past half-decade resolved, and high pent-up demand, Jannke says that he expects housing starts will continue to grow from an average of 1.584 million units in 2021 to 1.618 million in 2022. Ultimately, he expects lumber prices will continue to be volatile in 2022.
News in end use
Mortgage Credit Availability Increased in December
According to the latest Mortgage Bankers Association’s Mortgage Credit Availability Index (MCAI), which analyzes data from Ellie Mae’s AllRegs® Market Clarity® business information tool, mortgage credit availability increased in December. The MCAI rose 0.8% in December to a reading of 125.9. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.
NFIB’s Small Business Optimism Index Increases Slightly in December
The National Federation of Independent Business (NFIB), one of the largest small business associations in the U.S., reported today (1-11-22) that their NFIB Small Business Optimism Index increased slightly in December to a reading of 98.9, up 0.5 points from the November reading of 98.4. Seven of the 10 Index components improved and three declined. Twenty-two percent of owners reported that inflation was their single most important problem.
U.S. Sawmill Output Continues to Trail New Home Construction
The National Association of Home Builders (NAHB) has provided a deeper look into the relationship between U.S. domestic sawmills’ inability to increase output to meet growing demand since mid-2020 and the resulting lack of new home availability. The NAHB cites the lack of increased domestic sawmill activity as one of the primary factors that has contributed to record high lumber and panel prices and continuing price volatility in both the lumber and housing markets.
Homebuyers Will Continue to Face Record Supply Shortages in 2022
Redfin, the Seattle-based technology-powered real estate brokerage, in their latest housing market report reveals that the housing market started off the new year with fewer homes for sale than ever before, as active listings fell -27% year-over-year. The report also notes that the median home-sale price increased 14% year-over-year to $358,460, just shy of an all-time high. The median asking price of newly listed homes increased 12% year-over-year to $341,200.
Rental Costs Outpace Those of Home Ownership in 2021
ATTOM Data Solutions, the Irvine, California-based provider of nationwide property data, released on Friday (1-7-22) their Rental Affordability Report (RAR) for 2021. The RAR shows that owning a median-priced home is more affordable than the average rent on a three-bedroom property. Some 58% of the 1,154 U.S. counties analyzed for the report reveal that major home ownership expenses consume a smaller portion of average local wages than renting.
Fannie Mae’s Home Purchasing Sentiment Index® for December Reflects Conflicting Consumer Views on Homebuying and Home-Selling Conditions
Fannie Mae today (1-7-22) released their Home Purchasing Sentiment Index® (HPSI) for December. According to the report, the HPSI declined 0.5 points to a reading of 74.2 in December. This occurred as consumers continue to report conflicting views of homebuying and home-selling conditions.
U.S. Nonfarm Payroll Increases by 199,000 in December — Unemployment Declines to 3.9%
The U.S. Bureau of Labor Statistics (BLS) reported today (1-7-22) that total nonfarm payroll employment increased by 199,000 in December, following increases of 210,000 in November, 531,000 in October, 194,000 in September, 235,000 in August, 1.1 million in July, and 962,000 in June.
Employment in Canada Increases in December, While Unemployment Continues to Hold Steady
Statistics Canada (StatsCan) reported today (1-7-22) that employment in Canada increased by 55,000, or 0.3%, in December. The growth was led by gains in the goods-producing, construction, and educational services sector. Among males aged 25 to 54, employment increased by 63,000 (1.0%).
30-Year and 15-Year Mortgage Rates Moved Higher in the Week Ending January 6, 2022
Freddie Mac has released its Primary Mortgage Market Survey (PMMS) for the week ending January 6, 2022. The PMMS reports that the 30-year fixed-rate mortgage averaged 3.22% with an average 0.7 point, up from last week when it averaged 3.11%. A year ago, at this time, the 30-year FRM averaged 2.65%.