Lumber prices\u00a0broke a three-week losing streak and edged higher on Friday, extending its three-day rally to as much as 10% at $506 per thousand board feet.<\/p>\n\n\n\n
The gains come despite continued headwinds in the housing market, particularly a surge in\u00a0mortgage rates.\u00a0to their highest levels in over a decade.<\/p>\n\n\n\n
The\u00a0average 30-year fixed mortgage rate\u00a0surged to 5.89% this week, according to data from\u00a0Freddie Mac.\u00a0The surge to nearly 6% represents the highest level since 2008, in the midst of the housing market collapse.<\/p>\n\n\n\n
And those higher mortgage rates are leading to lower demand in the housing market, according to home builders across the country, which ultimately translates into lower demand for lumber.<\/p>\n\n\n\n
“If interest rates get to 6.5% the waters will get very choppy,” a Tampa home builder told\u00a0John Burns Real Estate Consulting\u00a0in its August survey.\u00a0Another builder in Harrisburg said it saw a big uptick in buying activity when mortgage rates briefly dipped in early August to 5%, signaling how strongly correlated mortgage rates are to home sales.<\/p>\n\n\n\n