The American lumber market is heading into its quietest months with mortgage rates close to 7%, fewer homes entering the construction pipeline and mills still waiting for a convincing reason to cut output. Prices have already lost their summer gains. GWMI expects the market to remain under pressure through the end of 2026, with the prospects for an early-2027 recovery depending largely on how much production is removed before spring buying returns.

The US housing market is producing two stories at once. Builders started more single-family homes in August, lifting the annualised rate by 7.6% to 918,000 units. Yet permits for future single-family construction fell 1.8% to 878,000, total housing starts declined and mortgage rates moved back towards 7%. Work already under way is supporting lumber consumption; the projects that should replace it are becoming harder to finance.

Mills and dealers are not facing the abrupt disappearance of demand seen during the sharpest housing downturns. Orders are thinning more gradually, just as buyers become reluctant to carry stock into winter. The building season is ending and expensive credit is reducing the number of households able to turn a planned purchase into a signed contract. GWMI’s base case is therefore a subdued fourth quarter, followed by a possible price recovery in early 2027 as mill curtailments and lean dealer inventories begin to tighten supply.