Lumber Prices Fall Amid Housing Market Struggles

2025-09-22 10:44 By Joana Ferreira 1 min. read

Lumber futures traded at $570 per thousand board feet, easing from a near three-year high of $698.5 reached in early August, as concerns over weakening demand persisted amid ongoing strains in the US housing market.

Builders are scaling back new construction amid a recent inventory glut and growing economic uncertainty, following the Trump administration’s fluctuating stance on tariffs for imported lumber over the past few months.

Meanwhile, a significant gap remains between the number of homes for sale and the demand from Americans seeking housing.

Affordability challenges have caused many buyers to withdraw in recent months, keeping construction activity muted throughout 2025.

However, recent cuts in US interest rates, along with prospects of further easing, have helped curb some of the losses.

Without a substantial increase in new home demand, the subdued pace of construction is likely to persist, as builders continue to compete with the steadily growing inventory of existing homes.



News Stream
Lumber Retreats on Lackluster Demand
Lumber futures retreated toward $590 per thousand board feet as the cooling of the North American residential construction sector eroded the demand floor that had supported the market since January. The primary downward pressure stems from a slowdown in housing activity where single-family starts plunged 14.2% in March and building permits fell 5.4% signaling a sharp reduction in seasonal requirements. This demand destruction was catalyzed by a 11 basis point surge in mortgage rates to 6.45% following the Federal Reserve decision to hold interest rates steady alongside global inflationary spikes. While geopolitical tensions in the Strait of Hormuz initially pushed energy costs higher, the resulting increase in financing costs and a 10% drop in US housing starts outweighed the potential for supply chain disruptions. Furthermore a 2.4% increase in unsold builder inventory forced price cuts.
2026-03-30
Lumber Drops Below $600
Lumber futures fell below $600 per thousand board feet as a slowdown in the North American housing market and rising financing costs outweighed persistent supply constraints. This downward pressure was driven by a 5.4% decline in building permits and a sharp 14.2% collapse in single-family housing starts, which signaled a cooling of construction activity as the spring season began. Additionally, 30-year fixed mortgage rates climbed to 6.22% following the Federal Reserve's decision to hold interest rates steady, the market was further pressured by a sharp drop in crude oil prices that reduced the energy-heavy transport and production overheads. These factors effectively neutralized the marginal one-point gain in the NAHB Housing Market Index to 38, leaving 37% of builders reliant on deep price cuts to move a 2.4% increase in unsold inventory. Structural supply issues like the 45% combined duties on Canadian softwood and ongoing sawmill closures continue to provide a floor.
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Lumber Rebounds past $600
Lumber futures climbed past $600 per thousand board feet as stabilizing housing sentiment and tightening production capacity across North America reversed a two month downward trend. The NAHB Housing Market Index edged up to 38 in March with buyer traffic and future sales expectations showing marginal gains despite persistent economic uncertainty. While 37% of builders continue to offer price cuts to attract buyers the market is finding support from a 29.1% surge in multifamily housing starts and a 7.2% rise in total residential construction activity. On the supply side mill closures and elevated duties on Canadian imports are projected to remove over 1.3 billion board feet from the market this year. Geopolitical tensions in the Middle East further pressure the outlook as rising energy costs inflate transport and shipping expenses for global timber. These factors suggest a shift toward a supply constrained environment that offsets the impact of high mortgage rates.
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