Lumber Market Insights - October 2026
Despite weak underlying demand, September delivered unexpected price increases across dimensional lumber and plywood. Here is what’s driving the divergence, how local builders are adapting, and how we’re working to protect your bottom line this winter.
The Macro View: Disconnect Between Pricing & Fundamentals
If you look strictly at recent market activity, pricing increases over August and September appear to fly directly in the face of underlying supply and demand metrics.
Weak US Demand Drivers: While Canadian domestic consumption plays a role, US housing demand remains the primary driver of North American lumber pricing. Current economic indicators continue to signal headwinds:
US Housing Starts fell 2.5% and Building Permits dropped 3% in August.
US mortgage rates remain elevated above 7%, suppressing household formation (a key metric tracking people moving and buying homes).
Consumer sentiment in the US has plummeted, with the University of Michigan Consumer Sentiment Index reaching an all-time low.
Tariff Shock vs. Mill Curtailments: In our view, much of the late-summer price surge was propelled by tariff-shock purchasing behaviors. Many expected prices to pull back once that initial surge cleared, however, pricing has remained surprisingly resilient.
The "Narrows" vs. the "Wides"
We are starting to see mild pricing weakness in narrow dimensions (2x4 and 2x6). In contrast, wide dimensions (2x8 and 2x10) remain elevated due to tight fiber supply and strategic mill curtailments. Mills have become increasingly adept at restricting output to maintain price floors. Currently, wide items are difficult to procure as mills pull back production and distributor inventories remain lean.
Our Inventory Strategy: We believe mill supply restriction strategies can only resist broader economic gravity for so long, and we anticipate pricing weakness as we move deeper into winter. To hedge against this volatility, we are maintaining appropriate inventory positions today rather than getting "too cute" trying to time market bottoms.
Sticky Core Items: Certain high-demand framing components (specifically 16-foot plates and PET studs) continue to exhibit sticky pricing that may remain elevated regardless of broader dimensional moves.
Plywood & Domestic Market Dynamics
Plywood is operating under a distinctly different set of rules than dimensional lumber because its pricing is far more closely tied to the Canadian domestic market.
Loss of the Pacific Northwest Buffer: As we’ve mentioned previously, when Canadian plywood prices spiked, the lower mainland and sea to sky region could draw lower-cost supply from Oregon and Washington producers due to manageable regional transport costs. Under the current tariff regime, cross-border imports from the US are no longer economically viable. As a result, Vancouver is now tied directly to domestic Canadian supply.
Eastern Demand & Seasonal Realities: Stronger-than-expected demand out of Ontario and Quebec (the core of the Canadian plywood market) kept plywood pricing elevated through September. However, with colder weather approaching across the country, November typically brings nationwide inventory adjustments and reduced building activity.
Near-Term Outlook: While long-term forecasts suggest the Canadian housing market may be near the bottom of its pullback, we remain cautious regarding Canadian housing starts over the next three months. We expect seasonal downward pressure on plywood pricing as winter sets in.
The Local Market: Early Signals of Stabilization
Conversations with local Vancouver builders over the past month reveal a nuanced picture across the Lower Mainland:
Transaction Activity: While many contractors report that total project volume is lighter than desired, an increasing number of deals and property acquisitions are starting to close. Property prices appear to have stabilized at levels where project mathematics once again make sense for buyers and developers.
Sentiment Shift: Although we refrain from prematurely calling a definitive market bottom, these transactions signal a subtle shift in industry sentiment, moving from hesitation towards more active decision-making.
Navigating Uncertainty: A newly called snap election adds short-term political and economic uncertainty, but Lower Mainland trades and developers continue to demonstrate their trademark adaptability.
Interior Design Show (IDS) Vancouver
We were excited to have the opportunity to participate in this year’s Interior Design Show (IDS) at the Vancouver Convention Centre. Kerrisdale Lumber partnered with STARK Architecture + Interiors, Kindred Custom Homes, TAG Panels, and Fast + Epp to bring the entrance feature installation, Reflection, from concept to reality.
Looking Ahead
As autumn settles in across the Lower Mainland, our focus remains on keeping your job sites running smoothly and predictably. As always, reach out to your Kerrisdale team members to discuss procurement strategies for your upcoming builds, and we look forward to working with you this season.
Sincerely,
Lyle Perry & the Team at Kerrisdale Lumber
