US lumber market slows due to high-interest rates and a fall in demand due to off-season

US lumber market slows due to high-interest rates and a fall in demand due to off-season

Posted on December 5, 2022 |

The deliveries for the random-length lumber futures have been trading between $400 and $567 per 1,000 board feet since September.
The growing US interest rates and offseason for construction demand weighed on new home purchases, which reduced lumber requirements.
For January, the delivery of random-length lumber futures traded between $411.10 and $453.20 per 1,000 board feet since November 3.
The $42.10 range is a nil condition for the lumber market because, on May 2021, it traded at $1711.20 and $1477.40 in March 2022.
Rising US interest rates pushed conventional 30-year fixed mortgage rates from below 3% in late 2021 to over 7% in November 2022, which evaporated the number of new home buyers without cash and weighed on lumber demand for new home construction.
The rapid increase of home prices over the past years priced out many potential buyers, further decreasing lumber demand.

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