Lumber prices dropped by over 6% on Tuesday, reaching $829 per 1,000 board feet following the latest rise in the 30-year fixed-rate mortgage, which now rests at 5.14%, according to Insider. As homebuying becomes less affordable across the U.S. and home renovations slow, demand for essential building commodities like lumber is quickly falling, and prices are down 39% from their March high of $1,357 per thousand board feet.
Still, a major housing deficit could revamp demand for lumber and other materials as Millennial buyers flood the market and put increased pressure on builders ahead of peak homebuying season.
That shortage of new homes built comes as the millennial generation graduates from student loan debt to mortgage debt, which should stimulate demand for new homes and could lead to a multi-year boom for new house builds, which would in-turn stimulate demand for lumber and lead to a continued increase in prices of the commodity.
