Random Lengths reports that the slowdown in construction and wood products imports by China could last throughout 2016, increasing US wood product supplies and keeping wood product prices weak in the USA this year. Source: NR Today
The log price, at 2.8 times the quoted lumber price, squeezes manufacturers due to the high cost of logs.
This spread for manufacturers between the price of logs and the sales price of product over the recent 3-month period has only been exceeded twice in the last 11 years – during months around December of 2008 and 2006.
Log prices have reached their winter highs in December and January during 2014 and 2015.
Traditionally, log prices would be expected to rise further during February, March and April or even May, depending on the year and the weather.
The 2015 December price is 9-10% below the December price of the last two years, held down in part by weak lumber prices.
The unsold inventory of homes in Portland, at 1.2 months, is the lowest in the last 11 years, smashing the unsold inventory level of 1.5 months in June, 2005.
Rural communities have not recovered as well. Douglas County still has a 5.3-month unsold inventory.
With few homes to choose from in urban areas like Portland, more home building should eventually follow. Yet, housing starts and building permits have dipped compared with last month and earlier in 2015.
Mortgage interest rates do remain very attractive and are trending down slightly.