Lumber Retreats on Lackluster Demand

Lumber decreased to 575.00 USD/1000 board feet, the lowest since March 2026. Over the past 4 weeks, Lumber lost 2.69%, and in the last 12 months, it increased 0.69%.

Lumber futures traded around $570 per thousand board feet, near a one-month low as the combination of high interest rates and falling home construction has crushed demand faster than sawmills can reduce supply. This downward pressure is driven by a 14.2% collapse in single-family housing starts and a 5.4% decline in building permits that signaled an abrupt cooling of spring activity. While ongoing sawmill closures have removed 1.3 billion board feet of capacity and US duties on Canadian imports remain at 45% these supply factors are failing to support prices against a sharp loss of buyers. The recent surge in mortgage rates to 6.46% has stifled traffic and left builders managing a 2.4% increase in unsold inventory that necessitates immediate price cuts. Furthermore the April 2nd announcement of C$2.1 billion in Canadian forestry subsidies has introduced expectations of more wood availability that offsets the risks of shipping delays through the Strait of Hormuz.

Lumber futures retreated toward $596 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.