NASHVILLE, TN – Rising mortgage rates are weakening housing demand and pushing lumber prices lower, increasing pressure on timber producers, sawmills and rural communities tied to construction and forest products.
Mortgage applications fell 4.2% in the week ending October 2, marking a fifth straight decline and the lowest level since January 2025. The average 30-year fixed mortgage rate climbed to 7.49%, its highest level since late 2023.
Lumber futures fell to about $527 per thousand board feet, the lowest level in two years. Higher borrowing costs are making home purchases and construction projects more expensive, reducing demand for lumber and other building materials.
Trade policy remains another influence. Canada has announced counter-tariffs on U.S. lumber and plywood following U.S. duties on lumber-related goods, adding another source of uncertainty for forest-product markets.
Timber producers will be watching bond yields, mortgage rates and housing activity for signs of recovery. Continued weakness in homebuilding could keep downward pressure on lumber prices and eventually affect mill demand for logs.
Farm-Level Takeaway: Higher mortgage rates and weaker housing demand could pressure lumber prices and reduce demand for timber from mills.