No, Lumber Liquidators Isn't To Blame For Weak Lumber Prices

February housing starts were released this morning and they were pretty terrible. Expectations were for starts to come in around 1.048 million. Instead, housing starts came in at a paltry 897K. Housing starts are now at the level as they were in January 2013. If one had been keeping an eye on lumber prices, the decline in housing starts is probably not too surprising.

The decline in housing starts was mostly centered in the Midwest, Northeast and West regions. Fortunately, the largest housing market by far, the South, remained relatively steady in February. Otherwise, the decline in the aggregate number would have been even greater. Housing starts in the Northeast are down over 45% year-over-year. This is the steepest year-over-year decline since 2009. 

On the positive side, building permits actually came in slightly above expectations. Building permit in February total 1.092 million while consensus was looking for 1.07 million. An increase in building permits for buildings with at least five or more units offset the decline in building permits for single-family homes.