An unexpected uptick in new single-family construction in August caused lumber prices to jump by more than 6% to $512.60 per thousand board foot on Tuesday. The hot commodity has fluctuated around $500 for most of the month, but prices appear to be stabilizing after soaring to an all-time high of over $1,700 per thousand board feet in May 2021, Insider reports.
A slowing housing market has been putting consistent pressure on lumber prices throughout much of 2022, and another anticipated interest rate hike could create more price volatility toward the end of the year.
But new permits for home construction, a potential indicator of future activity, plunged 10% to 1.517 million units last month.
Still, lumber prices jumped more than 6% to $512.60 per thousand board foot on Tuesday. The key commodity has swung above and below $500 for most of the month, driven by a slowdown in housing activity, a hawkish Federal Reserve, and fears of a US rail worker strike. Last week, mortgage rates also climbed above 6% for the first time since 2008.