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January 15, 2025
Forest product updates
Industry remains challenged by housing market.
Lumber prices ended the year up 9%, though they generally remain at break-even levels. Housing starts ended the year slightly down at 1.3 million units, driven by declines in the multi-family sector. Apartment construction is slowing due to persistently elevated interest rates, economic uncertainty and flat rent growth. Markets appear increasingly oversupplied, and this suggests multi-family construction has limited upside potential in 2025. Single-family home starts are likely to remain flat until the spring when the weather improves.
Log prices were generally flat across the Northwest, while those in Southern Oregon appear to be on an upswing due to lower log supply. Snow depth is building across the Cascades, suggesting loggers will slow cut levels and/or focus on lower elevation sites. An amendment to the Northwest Forest Plan, governing federally-managed lands, was proposed mid-November and is intended to reduce wildfire risk. The amendment proposes four alternative ways forward, three of which would, to varying degrees, increase harvest levels on public lands. It remains unclear how likely this amendment is to pass.
Profitability
December 11, 2024
Forest product mills: Slightly profitable - Bullish 12-month outlook
Timberlands: Slightly profitable - Bullish 12-month outlook
Many expect lower mortgage rates in 2025, which should strengthen the housing market and improve lumber demand. Potential tariffs on imported lumber would increase lumber prices.
Input costs have started to decrease and log demand / prices should increase assuming the housing market recovers in 2025.
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