Lumber Outlook: Construction Labor Surge vs. Mortgage Dips

Impact on Your Procurement Strategy

The massive jump in construction job openings—from 202,000 to 292,000 in a single month—is a significant leading indicator for lumber demand. This 44% increase in vacancies suggests that builders are aggressively preparing for the spring season, even if actual hiring remains slow. For procurement managers, this indicates that the 'latent' demand for dimensional lumber is building. Once these positions are filled, we expect a rapid acceleration in job site deliveries and a corresponding tightening of mill order files.

However, the macro picture is complicated by a 9.7% decline in mortgage applications over the holiday period. While rates have settled at 6.25% , the lowest since September 2024, the immediate cooling in applications provides a temporary 'air pocket' in demand. This creates a unique window for buyers: the builders are planning for growth (based on job openings), but the current transaction volume is soft. This is the ideal time to build inventory before the spring rush.

The ML-driven forecast predicts a 1.3% price increase over the next 7 days with a 0.54 confidence level . This modest upward signal aligns with the current labor data. While the ADP report shows large employers pulling back, small-scale residential contractors (who drive a large portion of dealer business) are still hiring. With labor costs up 4.4% , builders will be increasingly sensitive to material price volatility, making fixed-price commitments or early buys more attractive to protect project margins.

Looking ahead, the 10% year-over-year increase in the Purchase Index suggests that underlying housing demand is stronger than the recent two-week dip implies. We recommend maintaining a 30-45 day inventory buffer . The low Volatility Index of 0.03 suggests that while prices are trending up, we aren't at risk of a sudden 'gap up' in the next week, allowing for a disciplined, phased purchasing approach.

Key Takeaways

• Construction job openings rose to 292,000 , signaling builders are prepping for a busy spring; expect tightening supply by late Q1.

• Mortgage applications fell 9.7% recently, but the Purchase Index remains 10% higher than last year, suggesting underlying demand is resilient.

• Framing lumber prices are forecasted to rise 1.3% this week; low volatility suggests a steady upward trend rather than a sudden spike.

Market Outlook

Pricing Trend: UP

Confidence Level: MEDIUM

Recommended Action: Leverage the current 9.7% mortgage application dip to negotiate better terms on Q1 framing lumber before the 292,000 open construction jobs translate into active job site deliveries and higher mill quotes.

How LumberFlow Helps

Use our multi-supplier RFQ system to compare SPF and SYP pricing across your network while volatility remains low. Track these macro shifts using LumberFlow's automated price alerts to catch the next upward move.

Ready to stay ahead of market trends? Book a consultation with our team to see how LumberFlow's procurement platform transforms dimensional lumber buying.