Sharp Decline in U.S. Lumber Prices Raises Economic Warning Signs

By early September 2025, lumber prices in the United States had dropped sharply, falling nearly 24% since their August peak. The decline coincided with weak housing demand, as new home starts failed to rise as expected, signaling a slowdown in construction activity. Futures investors have begun reducing their positions following a series of price losses, further increasing market volatility. Some major sawmills have responded by cutting production or temporarily shutting down certain operations to mitigate financial losses. The lumber market is now viewed as an early indicator of economic risk, given that the industry tends to respond rapidly to shifts in supply, demand, and interest rates.