Lumber prices fell Wednesday as US mortgage rates hit the highest level in 14 years, pulling back from an earlier rally amid fears of a possible rail strike, according to Markets Insider.
According to the report, data from the Mortgage Bankers Association showed that the rate on a 30-year fixed mortgage jumped to 6.01% for the week ending September 9, up 7 basis points from a week ago.
The latest rate is the highest for a fixed mortgage since 2008 when the US was contending with the Great Recession after the housing bubble popped.
Lumber prices dropped 6% to $532.30 per thousand board feet. So far this year, prices have lost more than 50% and remain well off their all-time high of over $1,700 per thousand board feet reached in May 2021.
The key building material has been under pressure as the housing market slows while an inflation-fighting Federal Reserve continues an aggressive campaign of rate hikes.
And the Fed is expected to raise benchmark interest rates a further 75 basis points at the central bank's policy meeting next week. The latest inflation report showed that price pressures only cooled modestly in August and are still too high for a pivot toward a more dovish stance.
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