After nearly three months of weak pricing in North American lumber markets, there is evidence that many of those prices have reached a bottom. Structural panel prices are also showing greater resilience and increasing in some instances. The ride down took a lot longer than most traders had anticipated. This proved costly to many wholesalers who, back in April and May, believed a short-lived decline followed by a bounce in prices was a more likely scenario.
While housing starts and building permits continue to trend higher, builder confidence, which often dovetails nicely with housing construction figures, has dipped over the last few months.
So what gives?
According to the National Association of Home Builders (NAHB), which, in conjunction with Wells Fargo, publishes the builder confidence index, waning confidence is not necessarily due to diminishing demand for new homes.