By early September 2025, US lumber prices had fallen significantly, nearly 24% from their August peak.
The price declines came amid weak demand in the housing sector, as housing starts did not rise as expected, indicating a decline in construction activity.
Investors began to reduce their positions after a series of price losses, increasing market volatility.
Some major lumber mills responded to the decline by reducing production or operating hours to minimize financial losses.
The market is now viewed as an early indicator of economic risk, especially since the lumber industry is often a sector that responds quickly to changes in supply, demand, and interest rates.