US lumber prices fell by 9%, the lowest since 2020 due to the slow housing market

Posted on December 12, 2022   |  

The essential building commodity prices dropped by 9% in 3 days to a low of $382.80 per thousand board feet, which is below the $400 level that has served as key resistance since 2013, and annually prices are down 64%.

The decline in lumber prices is due to a downshift seen in all parts of the housing market, as soaring mortgage rates slow down sales and put a serious dent in homebuilder confidence.

At present, the average 30-year mortgage rate is at 6.5% which is less than the recent high of 7.03%, but still, double the levels can be seen at the start of the year. 

The surge in mortgage rates reduced the affordability for new home buyers, which led to a slowdown in existing home sales.

In October, existing home sales fell by 6% month-over-month, which is a 9th consecutive monthly decline, while existing home sales were down 28% year-over-year.