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Lumber prices drop back to pre-pandemic levels

Yahoo Finance reporter Ines Ferre looks at the price action for lumber, which is down 64% year to date.

Video transcript

RACHELLE AKUFFO: Now lumber prices are rebounding today from a 2022 low. Ines Ferre has more on the price action of the essential building material. So for more, we turn to Yahoo Finance's Ines Ferre. Ines, what are you seeing now?

INES FERRE: Yeah, Rachelle, we are seeing a bit of a rebound. But keep in mind that just yesterday, lumber futures hit a 2022 low. So let's take a look at the charts on our YFi Interactive. You can see that lumber futures right now just above $431 per 1,000 board feet. One board foot, by the way, is a 12-inch by 12-inch wide piece of wood. So basically, you are looking at these lumber prices that have basically plummeted year to date. You're looking at the price action down 61%.

And a lot of this, of course, has to do with the rising mortgage rates. So as we are seeing a slowing housing market and mortgage rates are inching closer and closer towards 7%, you've got homebuilders that are shying away from buying materials. You had KB Home. You had Lennar in their recent quarterly report, basically saying that they canceled some lot purchases.

I also spoke to a commodity broker who told me, look, because supply chain issues are better now, there is no sense in a slowing market for these homebuilders to be piling up wood. So you are looking right now at these levels that are prepandemic. I'm going to pull up now a three-year chart. Let's see, I'm going to pull up a five-year chart here. So you can see that you are looking at pre-pandemic levels for lumber, lumber losing all of its pandemic gains, guys.

RACHELLE AKUFFO: Indeed. All right, thank you there, Ines, for--