Sustainable, aesthetically pleasing and efficient to construct, mass timber could be an attractive option for an uncertain market – With record numbers of homelessness, a cost-of-living panic and a prevalent housing crisis, North America has rarely seen such uncertainty when it comes to the housing market. As the scramble for stability continues, could we see mass timber and cross-laminated timber (CLT) step into the void?
Current North American housing climate – The last three years have lumber traders and forecasters alert, with unprecedented boom-and-bust cycles in wood products prices and 2023 appears to see a continuation of this challenge. New home sales in the US have fallen short of expectations by 20-30% since the beginning of 2022 as prospective buyers struggle to afford homes amid high mortgage rates and near record-high home prices.
Things have been looking gloomy for US single-family construction for the last two years. Mortgage rates have climbed above 6% as the Federal Reserve has raised rates to fight inflation and this year some analysts believe housing demand could cool further if rates continue to rise.
The demographic breakdown of first-time buyers looks far from promising. Headship rates are low because the share of young adults living at home has been disproportionately high. It peaked at its highest level since at least 1983 in 2020 as the pandemic resulted in major job losses, particularly among young adults and gig workers. This level will remain high partly due to affordability issues that currently show no sign of getting better.
According to recent media there are currently 1,300 mass timber projects either built, being constructed, or in the design phase in North America.
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