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Trusses and Two-by-Fours: VA Tech and Forest Service Connect Housing Data to Forest Products Industry

Go into any hardware or home improvement store and you’ll likely see that something is up: the price of wood products. The same holds true for real estate: lower mortgage rates and an uptick in demand have caused house prices to soar in a wildly escalating market.

These drastic price fluctuations have put a significant burden on both the housing industry and the hardwood and softwood lumber companies that provide the materials for new buildings and remodeling work. To manage such a volatile market and make informed decisions, corporations and individuals in both fields need up-to-date data.

That’s where Urs Buehlmann, a professor in the College of Natural Resources and Environment, and Delton Alderman, a research forest products technologist with the USDA Forest Service, come in. Since 2011, they have worked together on a monthly housing report distributed to industry partners and individuals.

“In essence, we provide the housing industry with a distillation of the trends taking place in the U.S. housing market,” explained Buehlmann, a faculty member in the Department of Sustainable Biomaterials and a Virginia Cooperative Extension specialist. “Instead of people having to go out and find information and make sense of where things are going, we present that information in an easy-to-read format so that those in the affected industries can make good decisions going forward.”

The effort is built on work initially conducted by Buehlmann and Al Schuler, a now-retired Forest Service economist. Alderman, a former colleague of Schuler’s, has been researching housing markets and collecting U.S. economic and housing data for more than a decade. The report is one of many collaborations that connect Virginia Tech to research and engagement taking place at the Forest Service.

“The agency strongly encourages us to work with universities,” explained Alderman, who earned his bachelor’s, master’s, and doctoral degrees from Virginia Tech. “As federal researchers, we know that we can’t do everything on our own, and it helps to have a connection with one of the few schools in the country that has an established and well-regarded wood materials program.”

Urs Buehlmann, left, of Virginia Tech’s Department of Sustainable Biomaterials, and Delton Alderman, of the USDA Forest Service, have collaborated on the monthly housing reports since 2011. Photo by Krista Timney, Virginia Tech.

The monthly housing report, which Buehlmann estimates reaches some 20,000 professionals, helps companies and individuals by closing the gap between changes taking place in the housing industry and the impacts such changes have on the hardwood and softwood industries.

“The housing market is vital to the hardwood industry,” noted Judd Johnson, editor of the Hardwood Market Report and a professional with 30 years of experience working in and monitoring the U.S. hardwood industry. “The info that the housing report provides offers us comprehensive information on what’s happening not only in construction but on the financial side of things as well.”

The report includes data on monthly housing starts of single- and multi-family homes, building permits, completed constructions, and home sales, as well as how that data aligns on a month-to-month and year-to-year basis. There is also information about wood use in construction, regional housing prices, affordability data, and U.S. and global economic indicators.

While the data presented broadly encompasses the trends between housing and industry, the information has real-time impacts on decisions made by lumber producers and buyers, such as whether or not a contracting firm should purchase more truckloads of lumber or how the trends in new home manufacturing will impact secondary wood product demand.

“The key figures I look at are the number of housing starts and lumber usage that the report discloses,” said Robbie Watkins, a purchasing manager for Fortress Wood Products. “Those are some of the contexts I use to try to stay ahead of trends in a market that is going through an interesting moment.”

Alderman noted that the data in the report is critically important to the decision-making processes for builders and manufacturers.

“A lot of secondary manufacturers base their production schedule off housing-under-construction data,” he said. “While larger companies can afford the association fees that allow them to access this data quickly, we work to close the gap with smaller companies that need this information.”

For Buehlmann, the comprehensive nature of the report means that different audiences can find useful information in the document.

“The idea was never that someone would read it cover to cover,” he said. “The driving intention was that we would present the data consistently so that different needs could be covered by the same report. Some people will turn to the housing data first, while others might be more interested in the gross domestic product forecasts we provide.”

Although publishing a monthly report is a demanding task, the schedule means that the housing and economic information being shared is accurate and up to date.

“It is a valuable tool in the toolbox,” Johnson said. “The information allows companies and individuals to see where things are going and make better decisions on how to structure their business to benefit from the moment or weather the storm.”

Written by David Fleming

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