Changing housing market, timber glut limit prices

Housing start fluctuations and an abundance of timber are limiting the ceiling on stumpage prices in Mississippi now, but expect the market to improve when sawmills begin stocking up for winter. According to data from the U.S. Census Bureau National, home construction dropped 13 percent from May to June, which is considered a significant decrease. The seasonally adjusted rate for July -- nearly 1.17 million homes -- was 1 percent above June but 1.4 percent below the July 2017 estimate.“Housing starts did drop sharply in June and only rebounded slightly in July,” said John Auel, an assistant professor of forestry with the Mississippi State University Extension Service. “This was likely due to increased mortgage rates and a limited supply of homes, which drives the prices up, so people are not purchasing at the rate which would improve housing starts.”For Mississippi tree farmers, this data, coupled with favorable harvesting conditions, means now is not the best time to sell their timber.“Dry weather increases the amount of timber on the market because you can get logging equipment on sites that you couldn’t get them on in the winter because they were too wet,” said Extension forester Glenn Hughes. “If you have a site that is on sandy ground or dry soils, you would want to hold off until the first quarter of 2019 to get a higher price when supplies tighten.”