US homebuilder confidence remains low as permits slide, but expectation of an interest rate cut boosts future sales expectations. In other Business news: the future of Domtar’s Glenwood, Arkansas sawmill is in question; and UPM extends its pulp mill closures in Finland. Meanwhile: AF&PA joins trade-group opposition to proposed US rail merger; and the American Journal of Transportation opines on Trump’s tariff war impact on trade, trucking and home ownership.
In Forestry/Wildfire news: Canada’s growing Wildland Urban Interface increases fire danger; what to know about the newly created US Wildland Fire Service; and wildfires continue to rage in Oregon’s Lane County; as fire bans are lifted for northern Vancouver Island. Meanwhile: Plilomath, Oregon adapts with mass timber; the Canadian Wood Council features Toronto’s Limberlost Place; and the BC Institute of Technology advances careers in the lumber and sawmill sector.
Finally, a US Lumber Coalition commentary claims most of lumber duties paid by Canadian mills will go into the US Treasury.
Kelly McCloskey, Tree Frog News Editor
Lumber futures traded above $580 per thousand board feet in September, holding above earlier month lows as supply tightened and housing demand showed signs of renewal. Major producers such as Interfor reduced output through maintenance and shift cuts and mill idling while Canadian softwood flows remained constrained by tariff uncertainty which compressed prompt availability. Expectations of Fed further rate cuts later in 2025 encouraged forward looking builders to replenish inventories. New single family sales rose 20.5% to an 800k seasonally adjusted annualized rate in August which was the largest monthly rise since August 2022. Existing home sales held at a 4.00m SAAR in August and housing inventory stood at 1.53m units equivalent to 4.6 months of supply.
Lumber futures fell back below $570 per thousand board feet in September, reflecting the struggles in the US housing market. Builders are scaling back new construction amid a recent inventory glut and growing economic uncertainty, while the Trump administration’s fluctuating stance on tariffs for imported lumber over the past few months has added further volatility. Meanwhile, a significant gap remains between the number of homes for sale and the demand from Americans seeking housing. Affordability challenges have caused many buyers to withdraw in recent months, keeping construction activity muted throughout 2025. However, recent cuts in US interest rates, along with prospects of further easing, have helped curb some of the losses. Without a substantial increase in new home demand, the subdued pace of construction is likely to persist, as builders continue to compete with the steadily growing inventory of existing homes. [END]
When the Trump administration more than doubled import fees on Canadian softwood lumber earlier this year, the goal was to support domestic prices and boost US production. Instead, prices have plunged, and mills on both sides of the border are scaling back. A benchmark for the commodity mostly used in construction has plunged 18% since an August peak to the lowest in seven months, driven by sluggish homebuilding activity and a glut of inventory. The drop shows how protectionist measures aren’t always enough to protect domestic industries from broader market dynamics at a time when high interest rates and elevated costs are squeezing consumers and weighing on their confidence, dampening demand for new homes. …“The US producers were looking for more of a price bump from the duties, and they didn’t get one,” said Brooks Mendell, at Forisk Consulting. “The interpretation of that is, well, the demand isn’t there.” 
Major concerns are being expressed on both sides of the border regarding the higher US duties on Canada’s softwood lumber. …The current 35.19% duty, along with any steeper tariff, is detrimental to US homebuilders and homebuyers longer term, warns Rose Quint, of NAHB Survey Research. Higher mortgage rates of 6% to 7% since 2022 have already weakened housing demand and caused lumber prices to edge downwards. The real effect of tariffs might be delayed by wholesalers having stocked up building materials earlier in the year to avoid higher tariffs “Years of building above and beyond our traditional baseline is required to make up the 1.5 million deficit that we have in new housing units,” Quint adds. …Affordability challenges already existed and will be further worsened by the higher costs. …The overriding hope among the Canadian producers and American homebuilders is that a suitable agreement will be reached between the US and Canada. 
Higher duty rate and possible additional tariffs have transportation modes on edge. The softwood lumber dispute threatens to have repercussions on various transportation modes, particularly trucking. “Our members are saying their business is still okay, even with the softer rates due to mill overcapacity, but they’re worried that if anyone pushes on this wall with more tariffs, there’s nothing to hold it up,” says Dave Earle, the BC Trucking Association’s CEO. …Trucking has already been dealing with the overcapacity that was put in place for the greater demands for deliveries for most everything during the pandemic but has not subsided. …In terms of rail services, CPKC has seen its forest product shipments rise this year to date based on revenue ton miles. …At the Port of Vancouver in British Columbia, the potential to export more lumber is significant with approximately half of last year’s containers leaving the port empty. 
Canada’s annual inflation rate rose to 1.9% in August, Statistics Canada said on Tuesday, the final piece of economic data to be released before the Bank of Canada’s next interest rate decision. The higher rate was largely expected. Gas prices, which dropped at a rate of more than 16% in July, were still declining in August — but at a slower pace than they had previously, contributing to the upward tick in the overall inflation rate. …With gas stripped away from the overall inflation rate, the numbers mostly ticked down in August. Economists anticipate that the central bank will cut rates by 25 basis points during its Wednesday meeting — which would mark the bank’s first cut since March. “This report was mostly a low-drama affair,” wrote Douglas Porter, chief economist at BMO, in a note to clients. The pace of price growth “won’t cause the Bank of Canada much stress,” Porter wrote.
A “normal” annual softwood lumber price cycle sees prices dropping from Labour Day until early in the new year when buying starts again for the spring construction season. We are also expecting three interest rate cuts this year from the US Federal Reserve. With lower mortgage rates expected, will we see increasing demand for lumber? …The short term outlook for lumber prices continues to see weakness with price projections as low as US$450 per thousand board feet until the spring construction season. Looking into 2026 and 2027, prices are expected to recover to the mid-US$500 to low-US$600 per thousand board feet range. Ongoing duties, the upcoming court rulings on tariffs and the protracted housing shortage will all impact the price of lumber over the next two years. [to access the full story, a Globe & Mail subscription is required]
The Canada Mortgage and Housing Corporation (CMHC) released its 
Falling lumber prices are sounding an alarm on Wall Street about potential problems on Main Street. Wood markets have been whipsawed of late by trade uncertainty and a deteriorating housing market. Futures have dropped 23% since hitting a three-year high at the beginning of August and ended Friday at $535 per thousand board feet. The price drop might have been greater—but two of North America’s biggest sawyers said last week that they would curtail output, slowing the decline. Crashing wood prices are troubling because they have been a reliable leading indicator on the direction of the housing market as well as broader economic activity. …Analysts and traders say there will have to be further cuts to ease the glut of wood. That might not be a problem, given how higher duties have pushed up Canadian sawmills’ break-even prices while demand wanes. “We anticipate further closures or curtailments,” said Truist Securities analyst Michael Roxland. [to access the full story a WSJ subscription is require]
BURNABY, BC — Interfor announced that it has entered into an agreement with a syndicate of underwriters led by RBC Capital Markets and Scotiabank, under which the Underwriters have agreed to purchase, on a bought deal basis, 12,437,800 common shares of the Company at a price of $10.05 per Common Share for gross proceeds of $125 million. The Company has agreed to grant the Underwriters an over-allotment option to purchase up to an additional 15% of the Common Shares. …The Company intends to use the net proceeds of the Offering to pay down existing indebtedness and for general corporate purposes. …Proceeds of the Offering are expected to further enhance Interfor’s flexibility to navigate near-term market volatility. The Offering is scheduled to close on or about October 1, 2025.
Weakening U.S. housing construction has put another dark cloud over BC’s forest industry, increasing the likelihood of more mill shutdowns and layoffs. Lumber prices flatlined in recent weeks due to weak demand, just as new, higher duties in the Canada-U.S. softwood lumber dispute took effect. That means BC mills are operating at losses of up to US$220 per thousand board feet of two-by-fours, according to industry consultant Russ Taylor. …Taylor said market conditions during September are typically favourable for sawmills, but they’re decidedly negative this year. His forecast is that they will remain weak for the rest of the year, which will likely result in mills taking downtime. “We’re seeing it already,” said Kim Haakstad, CEO of the B.C. Council of Forest Industries. “We’re seeing temporary curtailments, we’re seeing extended holiday breaks, we’re seeing reconfigured shift schedules. …Haakstad said Parmar’s recognition of the urgency for change was encouraging.
Housing starts and pre-sales in much of Southern Ontario have earned failing grades and are on track to get even worse, a new study warns — a situation that “should alarm policymakers across all three orders of government.” The report from University of Ottawa’s Missing Middle Initiative compares housing starts and sales in 34 municipalities across the Greater Toronto Area and neighbouring Southern Ontario cities for the first six months of 2025 with the same period from 2021–2024. It found starts are down 40% relative to that four-year average, with pre-construction condo sales plunging 89 per cent and other homes 70 per cent. The reduction in starts has direct employment implications, and the collapse in pre-construction sales, the study says, is “a clear indication that Ontario’s housing situation will get worse before it gets better, and that market weakness is not isolated to the condo market.” …The study paints a similarly bleak picture for the first half of 2025.
Average mortgage rates in September trended lower as the bond market priced in expectations of rate cuts by the Federal Reserve. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.35%, 24 basis points (bps) lower than August. Meanwhile, the 15-year rate declined 21 bps to 5.50%. Despite the recent drop, rates remain higher than a year ago as last September saw the lowest levels in about two years. The 30-year rate is currently higher by 17 basis points (bps), and the 15-year rate is higher by 24 bps, year-over-year. …Markets began pricing in rate cuts from the Fed at the start of the month, particularly after news that jobless claims rose while inflation remained modest. On September 17, the Federal Reserve announced a 25 bps cut to the federal funds rate, bringing the target range to 4.00% – 4.25%. Falling mortgage rates have already shown an impact on housing activity. 
Housing is the foundation of the economy. …It’s not a surprise, then, that the Trump administration recently said it was considering declaring the housing crisis a national emergency. The federal government alone can’t solve the housing crisis. That said, the administration could take steps that would meaningfully help make American housing more affordable. …One of the biggest issues is supply. …But 
Cardboard-box demand is slumping, flashing a potential warning about the health of the American consumer given that goods ranging from pizzas to ovens are transported in corrugated packaging. A historic run of pulp-mill closures is also signaling problems for the companies that make corrugated packaging as well as the timberland owners who sell them wood. International Paper, the country’s biggest box maker, announced last month the shutdown of two US containerboard mills, which make the brown paper that is folded into corrugated packaging. …It is a surprising turn in the e-commerce era. Box makers and analysts say demand presently suffers from uncertainty in US boardrooms and export markets because of President Trump’s tariffs as well as from weakening consumer spending. The sputtering housing market has also hurt, reducing the need for moving boxes as well as packaging for building products and appliances. [to access the full story a WSJ subscription is required]
Single-family housing permits slipped for the seventh month in a row, highlighting affordability headwinds and weak demand. While multifamily permits ticked up, the sector’s volatility leaves the outlook uncertain. The split underscores a housing market still under strain, with single-family softness weighing on broader growth prospects. Over the first seven months of 2025, the total number of single-family permits issued year-to-date (YTD) nationwide reached 565,208. On a year-over-year (YoY) basis, this is a decline of 5.7% over the July 2024 level of 599,308. For multifamily, the total number of permits issued nationwide reached 286,836. This is 2.6% higher compared to the July 2024 level of 279,618.
Housing starts in the US fell last month to the lowest since May, as bloated home inventory slowed builders’ appetites to boost production. New residential construction decreased 8.5% last month to an annualized rate of 1.31 million homes, government data released Wednesday showed. The median forecast in a Bloomberg survey of economist was for 1.37 million starts. Meantime, starts of one-family homes fell 7% to an annualized 890,000, the lowest in more than a year. Multifamily construction, which has helped lift overall construction in recent months, also declined, falling nearly 12% to a three-month low. …Traders expect the Federal Reserve to trim interest rates multiple times this year, starting on Wednesday. And separate data out Wednesday showed mortgage rates fell last week to the lowest level in nearly a year, spurring a surge in refinancing.
