How much wood?
The U.S. lumber market has been highly volatile in recent years, reflecting broader trends in housing and the economy. Prices surged to a three-year high before plunging 25%, driven by trade uncertainties and a slowing housing market. While production cuts from major sawmills have softened the decline, lumber’s price swings remain a strong economic signal since wood is central to American homebuilding; about 90% of new U.S. homes are wood-framed, compared to Europe, where brick and prefabricated construction are more common. This reliance makes lumber costs a leading indicator for both housing activity and the wider economy.
Historically, wood has been deeply tied to American construction, from early settlers to Sears’ kit homes of the early 20th century, which made housing affordable and accessible. Although factory-built and modular homes are gaining traction today, they still represent just a small share of the U.S. market compared to Europe, where prefab is mainstream. With residential building permits falling to their lowest level since mid-2020, demand for lumber could weaken further. This slowdown pressures timber sellers while also encouraging builders and homeowners to consider alternative construction methods and materials, potentially reshaping parts of the U.S. housing market.
