Lumber prices fall as interest rates rise, home sales slow – Boston 25 News
FOXBOROUGH, Mass. — For two years, Chris Carreira struggled to keep lumber in stock at Chace Building Supply on Washington Street. Demand for building materials skyrocketed during the pandemic, and lumber prices doubled and tripled because supply was low.
But rising interest rates bring soaring timber prices back to Earth.
“They are starting to drop drastically. In the last three or four months, the price has dropped by 50%,” said Carreira, managing director of Chace. “Before COVID, a two-by-six was probably $6-7. At the high it was around $15-16, and now we are below $10.
Analysts say higher interest rates are driving down lumber costs, slowing new home sales and impacting new construction. The rate of new residential building permits is down 14.4% from August 2021, according to the Census Bureau.
“Obviously, rising interest rates are always going to slow down business,” Carreira said.
North Shore realtor Kevin Vitali doesn’t believe falling lumber prices will have a big impact on local housing prices, simply because there isn’t as much new construction in Massachusetts as in other parts of the country.
“To look at [the number of] all new construction in Massachusetts. It’s almost nothing,” Vitali said. “People suspect this is going to have an impact on house prices. If so, it will be very slow. We won’t see much. »
Carreira said most of its lumber is shipped from Canada. This is another reason why he says his prices are falling; there are no more COVID-19 restrictions at the border impacting quantity and shipments.
“The most important thing is to try to meet the demand right now,” Carreira said.
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