WASHINGTON, Woodworking Network – U.S. housing starts declined four percent in July with a large decline in construction of multi-family housing units, according to published reports. Housing starts fell to a seasonally adjusted annual rate of 1.191 million and the pace for June was revised downward, according to the Department of Commerce.

“Not only was there a drop of 4 percent in July, but there was an additional drop of one percent in June from the reported drop a month ago,” said Gene Wengert, the Wood Doctor.

“The supposed good news of more building permits issued, and lower mortgage interest, does not look too positive because of the land and labor shortages on home construction (typically much labor was provided by immigrants) plus the continued rise in the price of southern pine construction lumber.

“These issues mean fewer lower cost homes, including “starter homes” for younger people, as well as fewer cabinets and flooring for all prices of housing.”

Wengert pointed out that the recent tariffs and Commerce Department actions against low-cost Chinese cabinets will mean higher cabinet and wood flooring costs.

“(That is) good news for our cabinet industry, especially if hardwood lumber prices remain low,” he said. “Yet hardwood sawmills are being stressed by low lumber prices primarily due to lack of export opportunities (about one-quarter of hardwood lumber was exported) due to retaliatory tariffs.

“Any increase in hardwood lumber prices in the future (a likely event indeed) will put cost pressure on the cabinet industry, likely meaning more composite wood products being used instead of solid wood.

“It was indeed surprising at the recent AWFS show in Las Vegas to see so many sophisticated machines that could produce composite doors that, when finished, looked as good as wood, performed as well or better, and cost less.

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