Lumber Distributors NAICS 423310

May 26, 2026 - Single-Family Starts, Permitting Decline

• Single-family housing starts dropped by 9% month-over-month and decreased 2.4% year-over-year in April, according to the US Census Bureau. The number of building permits issued for single-family, privately-owned housing units fell 2.6% month-over-month and dropped 5.5% year-over-year in April 2026. Homebuilders have faced several headwinds, including tariffs that have increased the cost of key inputs like lumber and cabinets, and labor shortages, according to Reuters. Higher mortgage rates may also be weighing on demand for new single-family homes. The US war with Iran is pushing oil prices higher, along with US Treasury yields. Mortgage rates have moved higher as they are tied to the benchmark 10-year Treasury yield. As of May 21, 2026, the average rate for a 30-year fixed-rate mortgage was 6.51% compared to 5.98% when the war began.
• Home remodeling spending growth is expected to slow significantly early in 2027, according to the Leading Indicator of Remodeling Activity (LIRA) report released in May by the Joint Center for Housing Studies at Harvard. Homeowner spending on improvements and repairs is expected to increase 1.8% to $516 billion in the second quarter of 2026, compared to Q2 2025. In the third quarter of 2026, remodeling spending will trend slightly upward to $518 billion, up 2.4% from Q3 2025. Spending will then remain flat at $518 billion in Q4 2026, up 1.8% from Q4 2025. In the first quarter of 2027, year-over-year spending is forecast to rise just 0.5% to $523 billion. Remodeling permitting and building product sales have remained flat recently, but homeowners are expected to maintain spending near 2025 levels. Remodeling spending is likely to remain subdued, barring a turnaround in the construction sector.

• CNBC reports Home Depot beat Wall Street expectations and reaffirmed full-year guidance as homeowner customers remained resilient despite higher gas prices and weak consumer confidence. Fiscal first-quarter revenue rose about 5% year over year to $41.8 billion, while net income fell to $3.29 billion, down 4% year over year. Executives said customers continue to spend on smaller projects but are deferring larger renovations. Home center retailers continue to face headwinds related to a soft housing market, including high mortgage rates, lower housing turnover, and economic uncertainty. The company is investing in its professional customer segment through acquisitions to capture more share in a large, fragmented market, while maintaining expectations for modest sales growth this year. Home centers are key sales channels for lumber distributors.
• New single-family home sales rose 7.4% month-over-month and were up 3.3% year-over-year in March 2026, according to the US Census Bureau. March’s total new home sales reached 682,000 units. The National Association of Home Builders noted the uptick was due to moderating home prices and a lack of inventory in the existing home market. In March, the US median home price was $387,400, down 6.2% from $412,900 a year earlier. To address ongoing affordability constraints, builders have made strides toward offering more homes at the lower end of the price spectrum. In March, 20% of new homes were priced below $300,000.