Lumber Slides Further as Housing Weakness Persists

Lumber futures fell below $490 per thousand board feet, reaching their lowest level since July 2024, amid persistent weakness in the US housing market. Existing-home sales fell to their lowest level in 16 years, as mortgage rates above 7% and stubbornly high inflation continued to deter buyers. Although mortgage rates declined for a fourth consecutive week to 7.11%, affordability remains strained. Construction activity is also weak, with spending on lumber-intensive single-family homes falling 2.4% year-on-year in September, while builder sentiment dropped to its lowest level since 2012 amid high input costs. Mill closures across North America could tighten supply as prolonged US-Canada tariff uncertainty remains a headwind. A Democratic sweep of Congress has raised prospects for repealing duties on Canadian lumber, although the Trump administration has yet to secure a trade agreement amid ongoing negotiations.

Lumber futures fell below $510 per thousand board feet, reaching its lowest level since September 2024, as expectations grew that tariffs on Canadian lumber could be reduced. A Democratic sweep of the US Congress raised prospects for support to repeal the duties, while the Trump administration has yet to secure a trade agreement with Canada amid ongoing negotiations. The removal of tariffs could increase US lumber supply and place further downward pressure on prices. The US Commerce Department previously lowered antidumping and countervailing duties on Canadian softwood to 24.75% from 35.16%, although a separate 10% tariff keeps the total rate elevated at 34.75%. Meanwhile, prolonged trade barriers continue to weigh on the already weak US housing market, while mill closures across North America could tighten supply. Housing demand remains constrained by mortgage rates above 7% and high construction costs, although rates have declined for a third consecutive week.

Lumber decreased to 497.50 USD/1000 board feet, the lowest since September 2024. Over the past 4 weeks, Lumber lost 7.41%, and in the last 12 months, it decreased 5.48%.