Lumber prices fall as mortgage rates hit fresh 13-year high to edge closer to 6%

• Lumber prices fell Thursday, marking the first decline in more than a week, as mortgage rates rose to the highest since November 2008.
• Prices dipped 2.3% to $598.50 per thousand board feet, after rallying for six consecutive sessions to edge back above $600.

Lumber prices fell Thursday, marking the first decline in more than a week, as mortgage rates rose to the highest level since November 2008.

Prices ticked down 2.3% to $598.50 per thousand board feet, after rallying for six consecutive sessions to edge back above $600. Earlier this month lumber tanked toward a nine-month low as gloomy housing indicators continued to pile up.

The latest price drop comes as Freddie Mac said Thursday that 30-year fixed-rate mortgages rose to 5.81% from 5.78% in the prior week. The Wall Street Journal reported that some firms are already preparing to quote customers on a rate of 6% or greater.

"Fixed mortgage rates have increased by more than two full percentage points since the beginning of the year," Sam Khater, Freddie Mac's chief economist, said in a statement.

Mortgages rates have be surging as the Federal Reserve tightens monetary policy further to cool down persistently high inflation. Last week, it raised its benchmark rate by 75 basis points, the largest such increase since 1994.

Meanwhile, housing sales are also slowing. Sales of existing homes fell 3.4% in May to a seasonally adjusted annualized rate of 5.41 million units, the lowest since June 2020, the National Association of Realtors said on Tuesday.