Rising borrowing costs have cooled the U.S. housing market as Fed rates surged to year-to-date highs.
U.S. home prices are hovering at record highs, while both new homes and new home sales have declined.
Data from the U.S. Department of Commerce on May 24 showed that new home sales fell for the fourth consecutive month to 591,000 units, a year-on-year decrease of 16.6%, far below market expectations of 750,000 units and the lowest level since April 2020.
As a result, the timber market is experiencing an oversupply situation.
Lumber inventories at sawmills and builders rose as housing transactions fell. In the future, if the demand for housing does not soar, the supply of lumber will continue to surge, which may lead to a continued decline in lumber prices.
For the lumber industry, lumber buyers held off on orders as inventories rose and sawmills began slashing prices. Triple-digit discounts on lumber purchase prices have become common.