US lumber market chaos – why is the market slumping?

By Fergal McAlinden
Mortgage Professional America Magazine
July 9, 2024
Category: Finance & Economics
Region: United States

Russ Taylor

During a protracted slump this year prices have remained mired below $400 per thousand board feet for 12 weeks in a row. …Russ Taylor said the sharp spike in mortgage rates and borrowing costs since 2022 have weighed down on the lumber market’s performance, and look set to keep activity muted for the foreseeable future. The “bite” of rates hovering around the 7% mark is especially impacting the repair and remodeling sector, he noted, which marks the biggest lumber consumption segment in the US. …The prospect of borrowing costs remaining higher for longer could keep the market subdued by canceling out cheaper lumber costs and deterring builders from beginning projects. …Markets are currently expecting the Federal Reserve to cut its key rate at least once before the end of the year. Taylor noted that a single mild rate cut is unlikely to do much to change buyers’ or builders’ sentiments. 

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