Lumber prices hit their lowest level in nine months, according to Markets Insider.

Lumber prices have declined in nine of the last 11 weeks and comes as mortgage demand for homes falls to its lowest level in 22 years, according to the website. That weakness has been driven by a swift rise in mortgage rates, which surged above 5% for earlier this year and haven't budged lower.  

According to Finbold, a website that covers financial-related news, lumber futures are now trading below the $600 per-thousand-board-feet level, which was seen last time in November of 2021. Prices are down 60% from a peak of $1,480, seen in March, as U.S. new home sales hit a two-year low. 

The prices are pounding interest rates. Average interest rates for a 30-year fixed mortgage rate rose to 5.4% over the past week, according to the report, and mortgage applications fell 7% over the past week and are down 21% year-over-year. 

In addition, demand for mortgage refinances dropped 6% over the past week and is down 75% year-over-year. Mortgage rates at the same time last year were in the low 3% range. 

All of this demand destruction has translated into lower lumber prices as home builders pull back on projects and see consumers taking longer to close deals due to the higher costs, according to a May home builders survey conducted by John Burns Real Estate Consulting.

"Market drastically changed in last month. Traffic slowed significantly. Sellers of both new and used homes are dropping prices," a home builder in Oregon said.

The slowdown in home sales could help solve an affordability crisis that has plagued the housing market in recent years, as supply of new homes has dried up. But it could take months, if not years for a decline in lumber prices and a slowdown in the home builder market to translate into lower home prices. That's because of the strong level of demand seen from the millennial generation, which is just now entering its key household formation years. 

And a slowdown in the home building market means a slowdown in the supply of new homes hitting the market, which isn't helpful for home prices.