US lumber prices have increased to over $550 per thousand board feet in October—a six-month high—as strong U.S. economic indicators fueled demand for construction materials, reports Trading Economics. This price increase comes against a backdrop of favorable economic conditions in the U.S., paired with ongoing supply constraints and rising international demand.

Optimistic economic data underpins the heightened demand. The U.S. Gross Domestic Product (GDP) grew by 2.8% in the third quarter, reflecting consumer resilience and buoying confidence across the housing sector. Additionally, single-family home sales have climbed to their highest level in 16 months, while pending home sales recorded their largest increase since January 2023. Together, these indicators suggest a continued drive for construction materials, including lumber, as the U.S. housing market presses on despite challenges.

Supply-side factors are also contributing to the upward price trend. Wood mills in the southern U.S. have been prompted to raise prices due to regional supply constraints, even as rising demand presses mills to maintain production levels. Globally, a variety of constraints are compounding the tight lumber supply in the U.S. Reductions in logging activities across Europe, Russia’s ban on timber exports, and increased conservation measures in North America have all limited access to affordable wood sources