North American housing starts break records
Friday 21 Aug 2020Canada’s housing market beat records in July as pent-up demand unleashed a 26% surge in sales, data has showed. The performance of the housing market during this pandemic recession has been a surprise to bears, says BMO senior economist Robert Kavcic. “In fact, this has shaped up to be a bizzaro-recession for the sector, where what is usually down is up, and vice versa,” he said in a note.
This housing market is going against the norm. Every recession during the postwar era has seen a meaningful decline in home construction, except this one, said Kavcic. In the pandemic recession home building has been one of the few sectors able to operate relatively undisturbed with housing starts beating expectations. Further commentary on this market can be read here.
In the US, we have the same story. Home-building activity has staged a significant turnaround from the coronavirus-related slowdown. U.S. home builders began construction on homes at a seasonally-adjusted annual rate of 1.496 million in July, up 22.6% from the previous month and 23.4% from a year ago, the U.S. Census Bureau reported this week. Further coverage on the US situation can be read here.
And with booming home buying demand, softwood lumber prices have just kept on climbing.
Sources: financialpost, marketwatch, woodbusiness
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