Prices

Softening lumber prices offer hope for homebuyers, renovation project builders

Analysts say recent softening of record high prices for lumber could translate into a little relief for homebuyers and do-it-yourselfers while continuing to spur high profits for producing companies.

RBC analyst Paul Quinn says a US$14 drop to US$941per thousand board feet in the North American framing lumber composite price on Friday represents the first weekly decline noted by industry watcher Random Lengths since April 10. In the same week last year, the price was US$367.

He says declines could be expected to continue in coming weeks, but pointed out the November lumber futures contract increased US$28 over the same week to US$607 per thousand board feet.

Kevin Mason, managing director of ERA Forest Products Research, says prices are levelling off after hitting record levels this summer because price-conscious buyers are delaying projects and the peak summer construction season is drawing to a close.

However, he said the change in prices will simply drop lumber producers from “astonishingly profitable” to “remarkably profitable” levels, adding he expects robust financial results for the remainder of this year and likely through 2021.

Random Lengths reported that oriented strand board, a panel product commonly used to sheath new houses, was unchanged on the week at US$690 per thousand square feet, up from US$218 a year ago.

Homebuilders say forest product increases this year have added as much as $10,000 to the cost of building a typical single-family house in Canada.

This report by The Canadian Press was first published Sept. 28, 2020.

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Homes prices are crazy, but I want to drain my savings and buy

Dear Penny,

I live in the Philadelphia suburbs. I recently retired as an orchestra teacher in the public school system. I will be on Medicare in December.

I sold my large home and live in a modest apartment for $1,300 per month rent. So I’m comfortable financially and easily making ends meet.

HOWEVER, I really want to buy a small home. The real estate market is off the charts right now and prices are insane. I would also use most of my savings and have a mortgage. My payments would be about the same.

I have $200,000 in an IRA invested in stocks and bonds, $14,000 in a Roth IRA that I just opened last year and $80,000 in savings. I am debt-free and own a brand-new car.

I am collecting a monthly pension of $3,000 and $2,000 in Social Security after taxes and Medicare supplemental payments. My pension plan is a defined-benefit plan with a $900,000 death benefit.

Can you offer any advice as to whether or not I should buy a home?

-M.

Dear M.,

You can clearly afford to buy a home.

Normally I’d start the finger-wagging if you told me you wanted to spend most of your savings for a home purchase.

If you were still working, I’d ask you what would happen if you lost your job. And if you were a retiree who depended mostly on investment income, I’d warn you that a stock market crash could temporarily wipe out much of your nest egg.

But you have no debt and $5,000 of monthly after-tax income that’s guaranteed for life. Your income isn’t contingent on a salary or the stock market’s performance. So you can afford to spend a lot of your savings to buy a home.

Plus interest rates are historically low. That’s

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US existing home sales approach 14-year high; prices scale record peak

WASHINGTON: US home sales surged to their highest level in nearly 14 years in August as the housing market continued to outperform the overall economy, but record high home prices could squeeze first-time buyers out of the market.

The report from the National Association of Realtors confirmed home sales had recovered after slumping when the economy almost ground to a halt as businesses were shuttered in mid-March in an effort to slow the spread of COVID-19.

Demand for housing is being fuelled by record-low mortgage rates and a pandemic-fuelled migration to suburbs and low-density areas in search of more spacious accommodation as many people work from home. Federal Reserve Chair Jerome Powell told a congressional panel on Tuesday that the economy has shown “marked improvement” since plunging into recession in February, though the path ahead remains uncertain.

“The housing market has continued its remarkable recovery amidst an otherwise fraught economy that has been battered by the pandemic,” said John Pataky, executive vice president at TIAA Bank in Jacksonville, Florida.

“However, we should continue to be paranoid about the sustainability of sales. With lack of housing supply, there is an upward pressure on home prices which threatens to detract the benefits accrued from low mortgage rates.”

Existing home sales increased 2.4 per cent to a seasonally adjusted annual rate of 6 million units last month, the highest level since December 2006. August’s increase in homes sales, which marked three straight months of gains, was in line with economists’ expectations.

The median existing house price jumped 11.4 per cent from a year ago to a record US$310,600 in August. Sales last month were concentrated in the US$250,000 to US$1 million and over price range, with transactions below the US$250,000 price band down sharply.

Existing home sales, which account

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U.S. existing home sales approach 14-year high; prices scale record peak

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. home sales surged to their highest level in nearly 14 years in August as the housing market continued to outperform the overall economy, but record high home prices could squeeze first-time buyers out of the market.

The report from the National Association of Realtors confirmed home sales had recovered after slumping when the economy almost ground to a halt as businesses were shuttered in mid-March in an effort to slow the spread of COVID-19.

Demand for housing is being fueled by record-low mortgage rates and a pandemic-fueled migration to suburbs and low-density areas in search of more spacious accommodation as many people work from home. Federal Reserve Chair Jerome Powell told a congressional panel on Tuesday that the economy has shown “marked improvement” since plunging into recession in February, though the path ahead remains uncertain.

“The housing market has continued its remarkable recovery amidst an otherwise fraught economy that has been battered by the pandemic,” said John Pataky, executive vice president at TIAA Bank in Jacksonville, Florida.

“However, we should continue to be paranoid about the sustainability of sales. With lack of housing supply, there is an upward pressure on home prices which threatens to detract the benefits accrued from low mortgage rates.”

  Existing home sales increased 2.4% to a seasonally adjusted annual rate of 6 million units last month, the highest level since December 2006. August’s increase in homes sales, which marked three straight months of gains, was in line with economists’ expectations.

The median existing house price jumped 11.4% from a year ago to a record $310,600 in August. Sales last month were concentrated in the $250,000 to $1 million and over price range, with transactions below the $250,000 price band down sharply.

Existing home sales, which account for the bulk

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U.S. Existing Home Sales Approach 14-Year High; Prices Scale Record Peak | Investing News

WASHINGTON (Reuters) – U.S. home sales surged to their highest level in nearly 14 years in August as the housing market continued to outperform the overall economy, but record high home prices could squeeze first-time buyers out of the market.

The report from the National Association of Realtors confirmed home sales had recovered after slumping when the economy almost ground to a halt as businesses were shuttered in mid-March in an effort to slow the spread of COVID-19.

Demand for housing is being fueled by record-low mortgage rates and a pandemic-fueled migration to suburbs and low-density areas in search of more spacious accommodation as many people work from home. Federal Reserve Chair Jerome Powell told a congressional panel on Tuesday that the economy has shown “marked improvement” since plunging into recession in February, though the path ahead remains uncertain.

“The housing market has continued its remarkable recovery amidst an otherwise fraught economy that has been battered by the pandemic,” said John Pataky, executive vice president at TIAA Bank in Jacksonville, Florida.

“However, we should continue to be paranoid about the sustainability of sales. With lack of housing supply, there is an upward pressure on home prices which threatens to detract the benefits accrued from low mortgage rates.”

  Existing home sales increased 2.4% to a seasonally adjusted annual rate of 6 million units last month, the highest level since December 2006. August’s increase in homes sales, which marked three straight months of gains, was in line with economists’ expectations.

The median existing house price jumped 11.4% from a year ago to a record $310,600 in August. Sales last month were concentrated in the $250,000 to $1 million and over price range, with transactions below the $250,000 price band down sharply.

Existing home sales, which account for the bulk of U.S. home

Continue Reading