It's good to see you here. Today we're going over one of the few commodities that hasn't skyrocketed over the last month — and how it's affecting the red-hot housing market. Then, we take a look at the latest in Elon Musk's tussle with the SEC.
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Here we go.
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1. As most commodities have surged in March, lumber is dropping. That's because the housing market cooled in February, and mortgage rates are spiking since the Fed's rate hike. New home sales have slipped for two consecutive months, missing forecasts, and lumber seems set on bucking the trend of other supply-constrained commodities.
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February home sales were down 6% year-over-year to a seasonally adjusted rate. With the Fed hiking interest rates last week, the average traditional 30-year fixed mortgage rate surged to 4.72% on Tuesday, marking the first time in three years the figure has climbed past 4%.
And it all leads back to lumber. Higher rates means that homes are less affordable for consumers, and that monthly mortgage payments increase. This leads to a slowdown in new construction next year — which ultimately pulls lumber prices down.
This month, lumber has fallen 22% from early March's nine-month high of $1,357 per thousand board feet.
All the while, other commodities like oil, gold, and wheat have gone haywire in recent weeks. A wealth manager even said the "new FANG" investment includes fuel, agriculture, natural resources, and gold.
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