--- title: Timber! Lumber prices are falling hard - The Hustle description: Rising interest rates and low inventory have slowed the housing market, causing lumber prices to plummet. During the pandemic, supply chain issues and a rise in home projects caused lumber prices to skyrocket. But a shifting macroeconomic environment has led to lumber prices falling. image: https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/863779999-HS-News-Brief_2022-06-06T235939.829Z.webp --- # Timber! Lumber prices are falling hard ![Rob Litterst](https://thehustle.co/wp-content/uploads/2023/01/Rob-Litterst-pic.png?width=48&height=48&name=Rob-Litterst-pic.png) [Rob Litterst](https://hs-sbup.thehustle.co/author/rob-litterst) [Rob Litterst Twitter profile ](https://twitter.com/robbylit) Published: August 17, 2022 Updated: October 11, 2023 Lumber dealers have experienced a seesaw of emotions over the past couple years. ![Timber! Lumber prices are falling hard](https://hs-sbup.thehustle.co/hs-fs/hubfs/The%20Hustle%20News/Assets/Images/863779999-HS-News-Brief_2022-06-06T235939.829Z.webp?width=595&height=400&name=863779999-HS-News-Brief_2022-06-06T235939.829Z.webp) During the pandemic, supply chain issues and a rise in home projects caused [lumber prices to skyrocket](https://thehustle.co/why-is-lumber-so-expensive-right-now/). But a [shifting macroeconomic environment](https://www.wsj.com/articles/lumber-prices-slump-with-rising-interest-rates-11653835230) has left many dealers stumped, per *WSJ*, with lumber futures dropping 52% since early March. #### **During the pandemic…** … supply chain issues led lumber buyers to order more than they needed. But a couple changes in the housing market have drastically altered the supply and demand equation: - **The Federal Reserve** raised interest rates, causing the average 30-year fixed-rate mortgage to jump from 3.1% to 5.1% since the beginning of the year - **Single-family home** completions, starts, and building permits all declined in April This combination of rising rates, falling inventory, and big asking prices led new home sales to drop 16.6% between March and April — the largest decline in nine years. #### **Lumber dealers…** … have been left holding the logs. - In April, only 12% of dealers reported low inventory, down from 61% a year earlier - Many dealers are cutting prices aggressively to avoid piling up too much supply As dealers slow their orders, lumber producers are cutting back their operations as well. Canfor Corp., a major Canadian lumber producer, has been operating at ~80% capacity since March and expects to continue a reduced operating schedule through the summer. #### **What’s this mean going forward?** With the Federal Reserve [committed](https://www.cnbc.com/2022/05/17/powell-says-the-fed-will-not-hesitate-to-keep-raising-rates-until-inflation-comes-down.html) to raising rates to fight inflation, it’s unlikely the lumber situation will get much better any time soon. That said, one expert believes issues in Canada’s western forests, shipping problems, and duties at the US border will keep prices from dropping to pre-pandemic levels. In short, if prices held you back from doing that home project last year, it may not be a bad time to reconsider. Topics: [Commodities](https://hs-sbup.thehustle.co/tag/commodities) ## Follow us on social media prev next - ![The news around gas prices, explained](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/1051991159-HS-News-Brief_2022-06-23T004535.439Z.webp) ### The news around gas prices, explained - ![Backing out of Russia is costing oil companies billions](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/GIFs/1107882982-HS-News-Brief_2022-05-08T230902.998Z.webp) ### Backing out of Russia is costing oil companies billions - ![Why are gas prices skyrocketing?](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/491591435-News-Brief_2022-03-10T005851.439Z.webp) ### Why are gas prices skyrocketing? - ![Tesla’s water problem](https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/239316699-News-Brief_2022-02-24T023529.681Z.webp) ### Tesla’s water problem - ![Gas prices are rising at near-record levels. 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