Lumber prices hit 2022 low

Mortgage rates, inflation hampering commodity’s market

National /
Apr.April 13, 2022 11:00 AM

(iStock)

If prices fall in the forest, do they even make a sound? A dip for lumber might sound triumphant to weary homebuilders.

The price of lumber dropped to $829 per thousand board feet on Tuesday, the lowest mark for the commodity in 2022, Insider reported. Rising mortgage rates and growing inflation were cited as causes for the slip, along with a decline in home renovations.

The pricing represents a big 39 percent drop from only last month, according to Insider, when lumber was trading for as much as $1,357 per thousand board feet at its high for the month. The price is less than half of what it was in May, when it hit a peak of $1,733 per thousand board feet.

While rising mortgage rates and inflation are beginning to scare off some homebuyers, the drop in lumber prices could be the boon builders need to push back against the persistent supply and demand problems plaguing the market throughout the pandemic.

In February, privately owned housing starts rose 22.3 percent year over year, according to the U.S. Census Bureau. The seasonally adjusted annual rate of nearly 1.77 million housing starts was up 6.8 percent from the previous month. Single-family housing starts, meanwhile, increased 5.7 percent from the previous month.

More homes appear to be on the way, as building permits for privately owned housing units also jumped 7.7 percent year over year, though they dropped 1.9 percent from the previous month.

The National Association of Home Builders/Wells Fargo Housing Market Index slid for the third month in a row in March, dropping below 80 points for the first time since September. The report cited construction costs as a factor driving down homebuilder confidence.

The report came the same day the Federal Reserve raised interest rates for the first time since 2018, hiking the benchmark by a quarter of a percentage point. The rate increase will likely make borrowing more expensive, in turn making people less likely to spend.

[Insider] — Holden Walter-Warner





    Related Articles

    arrow_forward_ios
    Silverback's Josh Schuster and Hopson's Chu Mang Yee with rendering of the project at 131-141 East 47th Street (LinkedIn, Getty, Ismael Leyva Architects)
    Schuster out as Hopson borrows $156M for Midtown tower
    Schuster out as Hopson borrows $156M for Midtown tower
    Clockwise from top: Mayor Eric Adams, Bruce Teitelbaum, Adrienne Adams and Suri Kasirer (Getty/Adams via Paul Dilakian)
    A make-or-break moment for NYC’s housing crisis
    A make-or-break moment for NYC’s housing crisis
    A photo illustration of Veyoel Moshe Gardens in Kiryas Joel (LoopNet, iStock)
    Developers seizing on Hasidic suburb’s explosive growth
    Developers seizing on Hasidic suburb’s explosive growth
    Mayor Eric Adams and Extell's Gary Barnett (Photos by Paul Dilakian)
    Real estate’s titans talk building, selling, and reinventing the city
    Real estate’s titans talk building, selling, and reinventing the city
    Moinian's Joseph Moinian and Bushburg's Jordan Franklin with rendering of Empire State Dairy Company residences (Moinian Group, LinkedIn, Bushburg)
    Bushburg, Moinian snag $105M loan for East New York luxury project
    Bushburg, Moinian snag $105M loan for East New York luxury project
    Naftali Group's Miki Naftali, BRP Companies' Meredith Marshall (Photos by Paul Dilakian)
    Miki Naftali, Meredith Marshall talk development, death of 421a
    Miki Naftali, Meredith Marshall talk development, death of 421a
    R-L: Willow's Kevin Danehy, Era Ventures' Clelia Warburg Peters, Fifth Wall's Brad Greiwe and The Real Deal's Hiten Samtani (Photo by Paul Dilakian)
    Real estate tech is coming for your business
    Real estate tech is coming for your business
    Gary Barnett
    Gary Barnett has something to say
    Gary Barnett has something to say
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...