Lumber falls after mortgage rates solidify their move above 6% amid hawkish Fed rate hikes

By Matthew Fox
Business Insider
September 22, 2022
Category: Finance & Economics
Region: Canada, United States

Lumber prices fell 6% on Thursday, extending their two-day decline to 10% after the Federal Reserve hiked interest rates by another 75 basis points. The aggressive interest rate hikes from the Fed have helped solidify the ongoing surge in mortgage rates, which jumped above 6% for the first time since 2008. The surge in mortgage rates have taken a significant bite out of home sales, which has in-turn led to price cuts and has dented homebuilder sentiment. “The lumber market continues to be in a state of overall malaise as buyers anticipate lower overall demand going forward. Many yards are trying to pare their inventories to minimum levels and have really no fear of price upside,” Sherwood Lumber’s director of risk management Steve Loebner said. 

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