The North American lumber market has been stalled for much of 2023… [but] the longer-term fundamentals of the US and Canadian housing markets look good, as there is still an apparent pent-up demand for homes. As new residential housing represents 35 per cent of US lumber consumption, any upside in housing demand should increase lumber demand, especially after mortgage rates start declining next year. …Repair and remodelling activity (40 per cent of US lumber consumption) is slowing and expected to decline (but remain positive) for the rest of 2023 and then become negative, at least into the first half of next year. 

The typical lumber demand and price cycle sees a spring rally followed by a slowdown in July and August before picking up through September and then bottoming out at the end of October. Starting in November, lumber prices tend to rally for the rest of the year. However, not all years are normal, and this year has been quite abnormal where no spring rally happened. …In looking ahead to 2024, there seems to be considerable optimism out there by some expecting a good year. However, I am not so optimistic. …There is ample sawmilling capacity available to the North American market (especially SYP) at current demand levels and any shortages could be filled by non-Canadian imports, especially from Europe. This means that lumber prices could remain stalled until conditions for an increase in housing, R&R and overall lumber demand are back in place. The good news is that lumber prices will not be as low in 2024 as they were in 2023 and most forecasters remain bullish here.