Pent-up demand and demographics will keep the U.S. housing market strong “for years ahead,” according to Weyerhaeuser CEO Devin Stockfish.
In an interview with CNBC’s Jim Cramer, the timber giant’s leader said underbuilding dating to the last Great Recession and surging demand during the pandemic are fueling homebuying.
The National Association of REALTORS® estimates there is an “underbuilding gap” of up to 6.8 million units. It described the state of America’s housing stock as “dire.”
In another interview, with Eben Shapiro, a contributing editor at TIME magazine, Stockfish cited a Freddie Mac study indicating the U.S. is 4 million units underbuilt. “It’s the best housing backdrop we’ve had in well over a decade,” he commented. He also noted the pandemic prompted a “whole new appreciation for the value of a home” and pointed to the breakdown of the supply chain coming out of the Great Recession as factors contributing to underbuilding.
Stockfish believes there is a lot of pent-up demand, particularly among the “wave of millennials who are reaching stages of their life when homebuying becomes a priority.”
Weyerhaeuser is the largest private landowner of timberlands in the U.S. with 11 million acres. It also manages 14 million acres in Canada. The Seattle-based company typically plants about 150 million trees a year and harvests about 2% of its land base annually, which Stockfish says ensures they can “harvest at this level for hundreds and hundreds of years.”
“When you think about normalized housing over any historical period, really coming out of ’08, ’09, 2010, we’ve really been building well below that level for a significant amount of time,” he told CNBC’s Cramer.