Institutions Buy Timberland as Housing Access Tightens

Institutional timber managers bought 55% of the U.S. timberland acres that changed hands in 2025. Some younger Americans priced out of housing are also considering land and timber-related investments. Bank of America says institutions have bought about one million acres per year, a pace it expects to continue. Those purchases link a slow-moving land market to a housing market that many prospective buyers find difficult to enter.

Who Is Buying the Land

Bank of America’s 2026 outlook described a three-year streak of timberland dealmaking, with roughly one million acres changing hands each year. Timber managers bought 55% of the acres that changed hands in 2025 and sold 15%, according to the bank. Large managers buy for pension funds and endowments, which can wait decades for a recovery in the currently slumping U.S. housing market and better lumber prices.

The National Council of Real Estate Investment Fiduciaries’ Timberland Property Index tracks privately held U.S. timber properties owned at least partly for institutional investors. It returned 0.95% in the second quarter of 2026. Income accounted for 0.34%, and appreciation for 0.61%.

The investment horizon stretches for years. Pulpwood trees used for products such as paper towels and notebook paper can take 12-14 years to mature; trees cut for housing can take 25 years. “That is where the top value is,” said Pat Dorn, founder of Anchor Investment Management, a fee-only advisory firm in Columbia, South Carolina, and a former chairman of the South Carolina Forestry Association.

Housing Demand and Local Prices

Elevated home prices, higher mortgage rates and limited inventory have made homeownership more difficult for many millennials, said Nadeem Kassam, chief investment strategist at Marnoa Private Wealth Counsel. “As a result, some investors are looking for alternative ways to participate in real assets and potentially build equity without purchasing a home directly,” he said.

Some investors are considering timberland as an alternative asset while economic and market conditions look shaky. But returns aren’t guaranteed. Dorn owns 2,500 acres in South Carolina’s upstate region and said sluggish housing activity means more timber is growing than the market needs. “Supply beats demand, and that causes flat prices. Timber is not an investment I would make currently,” he said.

South Carolina Forestry Commission data show average statewide pine pulpwood stumpage prices fell from $5.67 a ton in the third quarter of 2025 to $3.79 in the third quarter of 2026, a decline of about 33%. Pine sawtimber prices fell about 6%, from $22.78 to $21.47 a ton, while hardwood sawtimber prices rose about 40%, from $16.04 to $22.52.

The Bureau of Labor Statistics’ producer price index for logs, bolts, timber, pulpwood and wood chips rose slightly in September. Prices have mostly declined since summer 2022. The index measures prices producers receive for those products, not timberland values or investment returns.

Access, Risk and Alternatives

Jake Kennedy, a Nashville-based realtor, said younger buyers are curious about timberland, though firsthand evidence of a broad trend is hard to find. “I don’t think my generation is suddenly giving up on houses and becoming timber barons,” he said. “However, I do think we’re a lot more interested in alternative places to store wealth than previous generations might have been.”

Timber-focused exchange-traded funds offer another route, though they’re niche products in an ETF market valued in the trillions of dollars. Kassam cited the iShares Global Timber & Forestry ETF (WOOD), with roughly $260 million in assets, and the Invesco MSCI Global Timber ETF (CUT), with roughly $30 million. Neither directly owns timberland or trees; most holdings are publicly traded companies involved in timber, forest products, wood manufacturing and other parts of the housing value chain.

Direct ownership is highly illiquid and brings management costs, property taxes, harvesting expenses and exposure to local markets, wildfire, pests, disease and trespassers, said Michael Martin, a timber owner in western New York and vice president of market strategy at brokerage firm TradingBlock. Martin said owners should seek competing harvest bids. Partial timbering every ten years or so has barely covered his property taxes. “At the end of the day, I barely break even,” he said.