Lumber futures have climbed back above $600 per thousand board feet, as improving housing sentiment and tightening production capacity across North America have reversed a two-month decline. The NAHB Housing Market Index inched up to 38 in March, with buyer traffic and expectations for future sales showing modest gains despite ongoing economic uncertainty. Although 37% of builders are still offering price cuts to attract buyers, the market is drawing support from a 29.1% surge in multifamily housing starts and a 7.2% increase in total residential construction activity. On the supply side, mill closures and higher duties on Canadian imports are expected to remove more than 1.3 billion board feet from the market this year. Geopolitical tensions in the Middle East are adding further pressure, as rising energy costs push up transportation and shipping expenses for global timber. Together, these factors point to an increasingly supply-constrained environment that is helping to offset the drag from elevated mortgage rates.