Lumber prices fall as mortgage rates rise
September 16, 2022 | 1:13 pm CDT
Lewis Lumber Products veneer grade walnut lumber

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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Larry Adams | Editor

Larry Adams is a Chicago-based writer and editor who writes about how things get done. A former wire service and community newspaper reporter, Larry is an award-winning writer with more than three decades of experience. In addition to writing about woodworking, he has covered science, metrology, metalworking, industrial design, quality control, imaging, Swiss and micromanufacturing . He was previously a Tabbie Award winner for his coverage of nano-based coatings technology for the automotive industry. Larry volunteers for the historic preservation group, the Kalo Foundation/Ianelli Studios, and the science-based group, Chicago Council on Science and Technology (C2ST).