Lumber, log and housing markets

Lumber and Log Prices in Washington at end of Q4, FY 2012
Lumber and Log Prices in Washington through Q4 of fiscal year 2012 (ending June 30, 2012). Source: DNR.

Log and Lumber Prices. Pacific Northwest log prices continue to hold relatively steady, with the price for a “typical” DNR log delivered to the mill averaging $475/mbf over the first five months of 2012, down slightly from an average of $481/mbf for all of 2011. West Coast lumber prices are up a little from last year, with the Random Lengths’ Coast Dry Random and Stud composite lumber price averaging $282/mbf for the first four months of 2012, compared with an average of $270/mbf for all of 2011.

Housing.Many U.S. housing market experts think that nominal housing prices are bottoming out. New home sales continue to be at historically low levels but new housing starts are finally creeping up from the historically low and flat level they have been in for the last three years. New home completions and sales will not increase significantly until the excess supply of existing homes, including those in the foreclosure pipeline, is absorbed. Reducing the inventory (supply) is a necessary part of restoring the U.S. housing market because it will contribute to the need for new houses to be built. The fragile economy still faces serious challenges, including high numbers of unemployed workers and foreclosed residential properties, which will weigh down the housing market for years to come.

From: DNR Economic and Revenue Forecast, Fiscal Year 2012, Fourth Quarter, June 2012.