However, additional tariffs could pour cold water on some of that optimism. Some countries are already facing existing tariffs on lumber, and depending on the outcome of the Section 232 investigation, they could be looking at even greater tariffs sooner.
“We just don’t know what’s going to happen,” Taylor said. “Brazil has a 50% tariff on its lumber already, because the US hasn’t settled with Brazil yet. Europe has a 15% tariff, but lumber has been excluded because of the 232 investigation. They think it’s going to be 15%, so that means they’ll need higher prices to come into the US market. All these things are kind of what’s next in terms of the unknowns, and we’ll have to wait and see.”
Unknowns heading into 2026
The other weighing factor on the lumber market, and therefore the home construction market, is what is going to happen with the US economy heading into 2026. As the Fed lowers rates, will that increase inflation? Will the job market struggles continue? Taylor notes that all of these, in addition to potentially new tariffs, leave analysts with more questions than answers.
“We’re probably six months out from seeing very high prices again, as Mills start to build order files and buyers come back to the market,” Taylor said. “We’ll probably see a much stronger market and with lower interest rates, hopefully by the new year. But there are so many unknowns. Where is the US economy heading? What’s going to happen with higher inflation?
“A lot of economists are talking about that could stall or squeeze the economy, maybe not into recession, but start to stall the economy, and that still means consumer confidence. People aren’t going to be spending as much, and that may slow down the economy as well, and put a drag on everything.”