I know, right?
Have you seen what’s happening to mortgage rates?
Lumber prices?
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Actually, yes. Mortgage rates are at 6.64%, essentially unchanged from the 4 week average of 6.65. Down slightly from the 52 week average of 6.74. The low in the past year was 6.08%, in late September. Not that the president really has anything to do with interest rates.
As for lumber prices, it's always fun to see how people truncate and cherry pick data and charts to make things look like they want them to. Lumber futures were at 530 in late October, and started climbing right before the election, hitting about 620 a week after. January/February are typically a slower demand period, when inventory rises and prices fall, but that didn't happen this year - from Christmas through March 1, prices rose pretty consistently to a 2.5 year high on March 24. After that, the price started slipping, but not for good reasons - demand is falling due to construction slowdowns and trade uncertainty. The big drop in price happened from April 2 to April 3 - corresponding with the tariff announcement - when projections of the cost impact could be made. Demand is continuing to slip, and non-tariff inventory is expected to rise, which is driving the price down...which isn't really a good thing in this case. That gets into the other problem with the chart - it's not for lumber prices, it's for lumber futures. Not the same thing. A drop in futures prices, especially a rapid one, indicates a softening of demand and increase in supply. That's bad. Even worse, most projections show an expectation that the futures prices will rise significantly toward the end of summer, as the non-tariff inventory gets cleared out and tariff inventory starts filling the hole. Prices of that lumber will be higher due to the tariffs, so futures prices will rise even with soft demand. I haven't found where anyone charts the price of actual physical lumber, but it's not going to see a price drop like the futures did. Price of lumber will continue to rise. Sellers will start pushing prices up in anticipation of the tariffs, and as the non-tariff inventory is cleared out the price will rise faster. At some point, an equilibrium will be achieved again - with supply adjusted to meet the reduced demand, at a higher price to pay for the tariff. Meanwhile, that reduced demand means reduced construction, which means fewer construction jobs.
And then, there's the way these two things play together. Housing prices are still high, with interest rates above 6. It's been tough for first-time buyers to get into a place for a couple of years. Higher lumber prices and reduced construction mean further slowing of the housing market, as there will be fewer houses built (at higher prices) for the same number of buyers. So, count on more people renting and/or living in mom's basement.
