Brokers and distributors are talking more bullishly, but that is not impacting dealers. Sawmill supply disruptions (curtailments and closures) continue, but this has not been enough of a signal for more buying. Commodity buyers continue to operate in a just-in-time mode, keeping inventories light. While that strategy limits near-term purchasing momentum, it may also lead to price volatility later.
US Housing & Repair/Remodelling
The NAHB’s “Affordability Pyramid” reveals that 52% of US households (70 million) cannot afford a $300,000 home, while the estimated median price of a new home is around $410,000 in 2026.
Mortgage rates had hit a multi-year low of 5.98% last week but the Iranian war has increased rates to 6.12% in the week of March 2.
US Housing Starts were lower by -0.8% in 2025 (1.356 million units) vs 2024 (1.367 million units). Single-family starts were lower in 2025 by -7.0% (0.942 Million Units) vs. 2024 (1.013 million units). Smaller sized homes have reduced overall the equivalent number of single-family houses by 90,000 units.
Repair and remodelling demand was flat in 2025 and is expected to be flat again in 2026, with forecasts ranging from down 1% to up 1%. Home Depot forecasts same-store sales at +1.0% and Lowe’s at 0% for 2026.
Overall US lumber demand in 2025 was down by -1.6% (-700 million bf; -1.1 million m3) as compared to 2024, and for 2026, a slightly higher outlook (+1 to 2%) is forecast.
Lumber Supply Trends
Through the first 11 months of 2025, Canada’s lumber production was lower by -4.5% vs the same period in 2024 (lower by -850 million bf; -1.25 million m3). BC was lower by -9% (-550 million bf) and the rest of Canada was lower by -2.3% (-300 million bf).
US production increased by +1.4% (+500 million bf; +800,000 m3) with the US South up by+2.7% (+550 million bf) and the US West was lower by -0.7% (100 million bf).
Clearly the higher duties (35% since September) and Section 232 tariff (10% since October) are having their obvious impacts. Total North America lumber production was lower by -350 million bf in 2025.
Mill Closures
From 2023 to 2025, there has been about 8 billion bf (13 million m3) of sawmill capacity closures. Canada represented 56% of closures, with BC dropping by -3.2 billion bf and the rest of Canada lower by -1.3 billion bf. Total mill closures in the US South were -2.2 billion bf (mainly older mills) and the US West was lower by -1.2 billion bf.
Imports & Exports
For the first 11 months of 2025 as compared to the same period in 2024, US lumber imports were lower by -7.6% (-1.1 billion bf; -1.8 million m3). From Canada, exports to the US were lower by -12% (-1.3 billion bf), with BC shipments were hit the hardest (-13.6%, -550 million bf), with the rest of Canada down by -11.0% (-750 million bf).
In contrast, exports from Europe to the US gained +8.6% (+200 million bf; 300,000 m3), but not even close enough to offset the declines from Canada.
Total lumber exports from Canada for the first 11 months 2025 were lower by -11.4% (-1.4 billion bf; 2.25 million m3). Aside from US exports (-12%), shipments to China dropped by -12.0% (-65 million bf) but increased considerably in 2025-Q4. Exports to Japan were lower by -11.1% (-45 million bf), and exports to other countries were higher by +2.7% (+ 10 million bf).
Total US lumber exports dropped by -8.8% (-100 million bf).
Lumber Prices
Over the last couple of weeks, US lumber prices have been generally trending lower, although some species or products have seen some minor increases (e.g. SPF as well as 2x4-16’).
Some prices have been moving higher while others have traded up and down. For example, the price spread between W-SPF 2x4 and Southern Yellow Pine (West) 2x4s was US$175/Mbf ($113/m3) in mid-October 2025 (US$477/Mbf vs $302). In early December, the spread narrowed markedly to US$54/Mbf ($380 vs $326). In early March, the spread narrowed further to $34/Mbf ($466 vs. $432).
I expect that the average annual price for W-SPF 2x4s (FOB BC mill) will increase by up to 10% in 2026 vs. 2025 ($510/Mbf vs. $465; $330/m3 vs. $300/m3) and SYP(W) 2x4s will increase by almost 20% ($440/Mbf vs. $369; $284/m3 vs. 238/m3). Starting off 2026, the supply and demand balance is much better than last year, and some price spikes are expected during periods of shortages to raise the average annual prices.
