Lumber futures are down moderately, from a three-month high of $614 per thousand board feet to $590, mostly due to a soft housing market (pending home sales slid by 9.3% in December 2025) and slow building demand leading up to the busy spring real estate season.
While demand for housing starts is weaker, as new construction lags 2024 housing start levels, and inventories are higher due to overstocked lumber in 2025 amid global tariff volatility, the industry should begin to pick up again by the second quarter of 2026.
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Builder confidence is up entering the new year, but lumber industry analysts say there’s plenty of room to grow as the industry and consumers keep pinching pennies.
“Builders are cautiously optimistic, but still protecting margins in a tight affordability environment,” stated Belco Forest Products in a late January research note. “For suppliers, this means customers will continue to scrutinize costs, lead times, waste factors and reliability. Confidence may be inching forward, but patience is still the dominant posture.”
Belco analysts also noted that while lumber supply should be robust in 2026, home affordability issues will crimp demand and put the sector on a route to stability, but not highly accelerated growth.
“Perhaps the clearest signal (is that) the NAHB Executive Forecast shows no material change in single-family starts projected for 2026 versus 2025,” the Shelton, Washington-based firm reported. “It tells us the industry is not positioning for a surge, it’s planning for steadiness. And steady markets expose inefficiencies far faster than boom cycles do.”
With the lumber industry looking like a stock picker’s market in 2026, which industry names stand tall right now? Try taking a look at these lumber stalwarts this year:
| LUMBER STOCK | YTD RETURN* | FORWARD YIELD* |
| International Paper Co. (ticker: IP) | 5.3% | 4.5% |
| Boise Cascade Co. (BCC) | 9.9% | 1.1% |
| Weyerhaeuser Co. (WY) | 10.0% | 3.2% |
| West Fraser Timber Co. Ltd. (WFG) | 15.8% | 1.8% |
| UFP Industries Inc. (UFPI) | 12.6% | 1.4% |
| Home Depot Inc. (HD) | 9.1% | 2.5% |
| PotlatchDeltic Corp. (PCH) | 4.2% | 4.3% |
*Year-to-date performance and forward dividend yield are as of Jan. 28.
International Paper Co. (IP)
YTD performance: 5.3% Forward yield: 4.5%
Trading around $40 per share with a 5.3% year-to-date return and a Sequoia-sized 4.5% dividend yield, IP still stands as one of the tallest oaks in the pulp and packaging industry in early 2026. While not a primary timber harvester, the company is a major downstream beneficiary of the wood products supply chain.
The Memphis, Tennessee-based pulp products giant reported adjusted losses of 8 cents per share on Jan. 29, falling far short of analyst estimates. The company recently acquired DS Smith and conducted cost-cutting measures during its 2025 restructuring. Revenues hit $6 billion, up nearly 30% from the year-ago quarter and beating estimates. IP took a 7% hit in trading by mid-afternoon due to the earnings loss; the damage may have been muted, however, by its plan to spin off its Europe, Middle East and Africa packaging business into a separate public company by 2027.
Both Truist and UBS maintained “buy” ratings on IP stock in January, with the former setting a $50 target and the latter projecting a 20% upside to the stock price. Any increase in demand for wood, pulp or paper products, expected by the second quarter of 2026, would likely add to positive sentiment toward IP shares.
One sign that IP shares are attractive is heavy institutional investor buy-in: Up to 100% of the stock is held by institutional investors, signaling strong interest from the professional investing community. One example is Alpha Omega Wealth Management LLC, which recently initiated a new position in IP stock, purchasing 39,082 shares valued at about $1.5 million, according to its latest 13F filing.
Boise Cascade Co. (BCC)
YTD performance: 9.9% Forward yield: 1.1%
This Boise, Idaho-based engineered wood products manufacturer has taken a turn for the better recently, with a 9.9% share price return so far in 2026, and is now trading around $80 per share, which sits near the lower end of its 52-week trading band.
The company sports a $6.7 billion revenue base, or about $889,000 in revenues per employee. Most Wall Street analysts remain bullish on the stock, with the majority in overweight positions, calling for an average stock price of $91 per share in 2026.
Boise Cascade also has a leadership transition underway, with the company tapping Chief Operating Officer Jeff Strom as its next CEO, replacing Nate Jorgensen, who’s exiting on March 2. The move is a way to ensure continuity of the company’s growth strategy, leveraging Strom’s nearly two decades of experience with the firm.
D.A. Davidson recently maintained its “buy” rating on the stock, with a $95 price target, while Truist followed suit with a $92 price call. As with International Paper, Wall Street heavyweights are buying into the stock, with Wellington Management Group recently adding 539,962 shares at $77.32 per share. That’s a 19.8% boost in the money manager’s BCC position.
Weyerhaeuser Co. (WY)
YTD performance: 10% Forward yield: 3.2%
Trading at just $26 per share and up 10% year to date, this Seattle-based forest products company is the largest institutional landowner in the U.S., and it’s making news on what it plans to do with all that property.
In 2027, Weyerhaeuser expects to roll out a green energy initiative in McComb, Mississippi, where it’s building the first of multiple biocarbon plants that turn lumber and wood waste into what the company calls a drop-in replacement for metallurgical coal, a core component of steel production. If, as company leaders say, Weyerhaeuser follows through with 10 green-energy manufacturing facilities across the U.S., it can produce about 1.5 million biocarbon tons yearly.
The move amplifies Weyerhaeuser’s emerging reputation as a company that adapts to change. By turning wood chips into biocarbon, the company is opening a potentially substantial cash pipeline, with company officials noting that annual biocarbon profits could reach $85 million by the end of the decade.
The company just received a “buy” rating from D.A. Davidson, with a $31 target price, and a similar upgrade from Citi. All told, Weyerhaeuser has historically operated with some of the highest profit margins in the lumber industry and ample land to increase production in a rising-demand environment, which should make the company a candidate for share-price growth in 2026. Investors seeking to plant a long-term flag in lumber may have a prime target in WY.
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West Fraser Timber Co. Ltd. (WFG)
YTD performance: 15.8% Forward yield: 1.8%
This Vancouver-based lumber and engineered wood products company’s share price is already up 16% in 2026, buoyed by an estimated 25% three-year revenue growth rate and a tidy 20% net margin, illustrating robust profitability.
West Fraser shares continue to benefit from the aging and transition of U.S. baby-boomer homeowners. Many older homeowners were able to lock in low interest rates during the pandemic and are more likely to pivot to a home remodel (as many homeowners have done in the past five years) rather than sell the property, especially as U.S. residential home prices begin to moderate in 2026.
Either way, there should be continued demand for WFG’s boards, plywood and other lumber for engineered homebuilding and remodeling projects, especially in wildfire-prone areas of Los Angeles, over the next several years. Lower inflation and softer interest rates in 2026 should sustain that demand throughout the year, which is good news for West Fraser and its shareholders.
Toss in a useful 1.8% dividend yield and a stock price that’s only beginning to ascend (WFG shares are down 18% over the past year), and opportunities knock on this wooden doorway.
UFP Industries Inc. (UFPI)
YTD performance: 12.6% Forward yield: 1.4%
UFP Industries is another early 2026 lumber leading light, with its share price up 12.6% through late January. That’s somewhat surprising, given UFP’s sour Q3 earnings report delivered in late 2025, where key metrics like adjusted earnings and net sales underperformed, which contributed to UPI’s negative revenue growth of late.
On the upside, Grand Rapids, Michigan-based UFP specializes in supplying wood products, primarily for retail, packaging and construction, all of which should see ample demand over the next quarter as the home sales and remodeling markets perk up.
Analysts appear either neutral or moderately bullish on UFPI shares, with Stifel recently setting a $98 per-share price target, up from $95, and D.A. Davidson analyst Kurt Yinger moving from “neutral” to “buy” with a $112 price target, up from $110 in an earlier research note. The stock has traded between $92 and $107 per share since the beginning of 2026.
UFP is another company that should see burgeoning demand for its wood products, especially for residential home repairs. Couple that trend with the incoming demand for wood from UFP’s mainstay retail and construction customers, and there’s a decent rationale to add UFPI shares to investor portfolios before the spring homebuilding and renovation seasons begin in earnest. The stock also pays a modest 1.4% dividend yield.
Home Depot Inc. (HD)
YTD performance: 9.1% Forward yield: 2.5%
Home Depot shares are trading around $375 per share, up 9.1% year to date as of Jan. 28.
HD is benefiting from the White House’s recently announced plan to have the federal government purchase $200 billion in mortgage-backed securities using cash reserves at Fannie Mae and Freddie Mac to bolster the U.S. housing market. The homebuilding and remodeling retail giant is also expecting to benefit from a new AI tool campaign called “Orange Apron” (in partnership with Google Cloud) that provides real-time, expert guidance to customers, including contractors, renovators, remodelers and do-it-yourselfers.
All that should help its bread-and-butter business, selling large quantities of wood and the hammers, nails, drywall and paint needed to handle major restoration jobs.
Mix in a 2.5% dividend yield and rising demand for homebuilding and remodeling projects, and Home Depot stands out as a rising retail force in 2026, especially if you predict an improving U.S. housing market, lower interest rates and stable consumer spending.
PotlatchDeltic Corp. (PCH)
YTD performance: 4.2% Forward yield: 4.3%
Lumber investors can also take the real estate investment trust route to solid sector positions with PotlatchDeltic, a REIT with ample timberland assets across the U.S., including Alabama, Arkansas, Idaho, Minnesota and Mississippi, all of which are heavy lumber-producing states. The REIT is trading at $41 per share and is up 4.2% in 2026, with a sizable 4.3% dividend yield.
Company shareholders recently green-lit a buyout from Rayonier Inc. (RYN), a Florida-based publicly traded timberland REIT, with the merger set to happen after the market close on Jan. 30. After that date, Rayonier shareholders will have 54% of PCH share ownership, while PotlatchDeltic shareholders will hold 46%. The combined company will trade under the RYN ticker symbol on the New York Stock Exchange.
A group of seven consensus industry analysts has set an average price target of $45.57 for the new company, with a high estimate of $51 and a low estimate of $40 per share. In December, Seaport Research bumped up its PCH price target from $55 to $57 per share.
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The 7 Best Lumber Stocks to Buy for 2026 originally appeared on usnews.com
Update 01/29/26: This story was published at an earlier date and has been updated with new information.
