When the economy and markets appear unstable, gold and government bonds have traditionally been safe havens for capital. Recently, some investors have also begun to focus on a more “tangible” asset: timber.
This feature is highly appealing: it’s a return to basics—a naturally growing asset that matures on its own and can be harvested for profit, while also allowing you to hunt, camp, or forage for wild food.
According to Bank of America, institutional investors are purchasing forestland at a rate of 1 million acres per year. Some financial advisors say individual investors—including young Americans priced out of the housing market due to high home prices—are also beginning to take interest in this asset class. However, this is far from a buying frenzy; existing forestland investors caution that this asset class may not generate high returns in the short term.
Pat Dorn, founder of Anchor Investment Management, a fee-based advisory firm in Columbia, South Carolina, and former president of the South Carolina Forestry Association, said, “Timber is a very low-return investment. I’ve reduced my own exposure.” Dorn owns 2,500 acres of forest land in South Carolina’s rapidly growing Upstate region. He noted that the problem lies in the current weakness of the housing market, with more timber being grown on the market than is being demanded.
He said, "Supply exceeds demand, which leads to prices stagnating. Wood is not an investment I would make right now."
The U.S. Bureau of Labor Statistics' Producer Price Index shows that prices for logs, roundwood, lumber, pulpwood, and wood chips rose slightly in September, but have generally been on a downward trend since the summer of 2022. This metric measures the prices received by producers for these products, not the value of forestland or investment returns. Over the very long term, prices have risen significantly.
Financial institutions regard this asset class as one suitable for long-term investors.
Ken Shepard, Head of Specialized Asset Management at Bank of America Private Bank, said that timberland is not a tactical asset that can be easily entered or exited based on short-term market conditions. “We view it as a strategic, long-term investment supported by several favorable long-term trends, including the ongoing expansion of the timber industry in the southern United States and growing demand for wood products beyond traditional construction uses,” Shepard said.
For example, he noted that demand for wood pellets used in bioenergy, though controversial, has increased significantly. Additionally, strong demand from recreational and lifestyle buyers is supporting forest land values, providing additional support to land prices beyond those driven by timber harvesting revenues.
The Timberland Property Index by the National Council of Real Estate Investment Fiduciaries tracks U.S. private timberland held at least partially by institutional investors. The index shows a total return of 0.95% for the second quarter of 2026, comprising 0.34% in income and 0.61% in appreciation.
Forest land managers lead the acquisition
The U.S. Bank 2026 Outlook Report states that the purchase rate of 1 million acres per year has been maintained for three consecutive years and is expected to continue at this pace.
According to data from Bank of America, in 2025, forest managers purchased 55% of all land transactions and sold only 15%. Institutional investors are playing a long-term game. Large forest managers buy assets on behalf of pension funds and endowments, which can afford to wait decades and bet on a long-term recovery of the U.S. housing market, thereby benefiting timber prices. However, private landowners in today’s market hold a different perspective.
Dorn noted that timber companies purchase less mature trees for pulp, which can be used for tissues or notebook paper, and these trees take 12 to 14 years to mature. Trees used for sawing and processing require even longer, while the most valuable portion—wood used for home construction—often takes 25 years. He said, “That’s where the highest value lies.”
According to Dorn, the price landowners receive for standing timber depends on the intended use of the trees. Pine pulpwood consists of trees ground into paper and packaging materials, while pine sawtimber refers to larger trees cut into lumber for residential construction. Meanwhile, hardwood sawtimber includes oak and other large trees, primarily used for flooring, furniture, and pallets. Each product has different buyers, so the price of one may rise while another falls.
According to data from the South Carolina Forestry Commission, the average stumpage price for pine pulpwood statewide—defined as the price paid by buyers to landowners for standing timber prior to harvest—fell from $5.67 per ton in the third quarter of 2025 to $3.79 per ton in the third quarter of 2026, a decline of approximately 33%. During the same period, pine sawtimber prices decreased from $22.78 per ton to $21.47 per ton, a drop of about 6%, while hardwood sawtimber prices rose from $16.04 per ton to $22.52 per ton, an increase of approximately 40%.
Dorn said that historically, pulpwood prices once reached $12 to $18 per ton; 20 years ago, softwood prices ranged between $35 and $40. He noted that if the housing market eventually recovers, these prices could rise again, as pine lumber is cut into wood for new homes and thus tends to follow trends in residential construction.
However, Dorn believes that if properly located, timberland can also be a good investment—but the reason lies more in the land itself than in the timber. “The return comes from the land, not the timber,” he says.
He advises anyone considering investing in timberland to seek high-quality parcels on the outskirts of growing metropolitan areas, which may appreciate as local populations continue to expand. “If someone wants to buy land near a growing urban area and hold it long-term, timber can be a reasonable way to generate some income from the property during the holding period—though the returns are modest,” he said.
Ownership risk is widespread
Michael Martin, Vice President of Market Strategy at TradingBlock, a brokerage firm in Westchester County, New York, says that timberland can be a solid long-term investment, but the reality of being an actual owner differs from the romanticized image of vast, undeveloped forests. It is not as passive an investment as it may appear.
Direct ownership of forest land has poor liquidity and is accompanied by management costs, property taxes, harvesting expenses, exposure to local timber markets, and risks such as wildfires, pests, diseases, and poaching or illegal logging.
And when it comes time to harvest, you also need to ensure you get the best price. “If you just work with a local small company without letting multiple parties bid, you won’t always know if you’re getting the optimal price,” says Martin.
He also noted that timber prices are highly localized, which affects whether it is a sound investment. "I've been reviewing stumpage price reports because timber prices are extremely localized. An oak tree in western New York could be worth entirely different from one in the Adirondacks," Martin said.
In addition, he said that partial harvesting every decade or so barely covers the property taxes. "In the end, I'm barely breaking even," he added.
Some local real estate and investment market participants say young buyers are curious about it, but it’s difficult to find first-hand evidence.
Nashville real estate agent Jake Kennedy says, “As a millennial and a real estate agent, I understand this appeal—I’ve even considered buying woodland myself.” He notes that his generation has lived through the dot-com bubble burst, the Great Recession, the pandemic, and significant fluctuations in the housing market, and now faces inflation. “One lesson we’ve learned from these experiences is that scarcity matters, especially when it comes to where you store your money,” Kennedy says, pointing out that IPOs can be announced endlessly and new cryptocurrencies can be created indefinitely.
“But you can’t create 500 acres of land out of thin air,” Kennedy said. “Wood is a resource that takes decades to grow. Owning a tangible asset provides a sense of security,” he added. However, he also cautioned that wood’s durability does not guarantee profitability. Trees are very “finicky” and are affected by many variables.
People who have interacted with Kennedy believe that timber is a relatively safe place to park funds, as demand for wood products will not disappear. “At the same time, yes, hunting is a common activity—literally so—as owners wait for their investments to grow and mature,” he said.
“I don’t think our generation will suddenly abandon housing to become timber magnates. But I do believe we’re more willing than previous generations to look elsewhere to store wealth,” he added.
Wood ETFs provide access to this asset class.
For many millennials, owning a home has become increasingly difficult due to high housing prices, rising mortgage rates, and limited inventory in many markets. “As a result, some investors are seeking alternative ways to gain exposure to real assets and potentially build equity without directly purchasing property,” said Nadeem Kassam, Chief Investment Strategist at Marnoa Private Wealth Counsel.
In addition to holding timber directly or through institutional funds, investors can gain exposure to this theme through timber ETFs and funds focused on timber; it is closely tied to long-term housing demand and construction activity, though it remains a niche investment in today’s multi-trillion-dollar ETF market.
Kassam mentioned the iShares Global Timber & Forestry ETF (WOOD), with assets under management of approximately $260 million, and the Invesco MSCI Global Timber ETF (CUT), with assets under management of approximately $30 million.
He said, “This investment thesis is supported by the persistent housing shortages in many parts of the United States, as well as bipartisan backing for policies aimed at increasing housing supply and improving affordability. If these efforts ultimately lead to increased housing construction, demand for lumber and wood products could benefit.”
However, he noted that investors should understand that timber ETFs are not direct investments in land. Neither ETF holds trees.
“They mostly hold publicly traded companies involved in timber, forest products, wood manufacturing, and other segments of the housing value chain,” said Kassam, explaining that the advantages of such products lie in their liquidity and accessibility, but returns are not determined solely by timber prices.
WOOD’s largest holdings include large forestland owners such as Weyerhaeuser, as well as Brazilian pulp producers Suzano, Nine Dragons Paper, and West Fraser Timber. CUT, on the other hand, is more focused on paper, packaging, and materials manufacturers like Svenska Cellulosa, UPM, Stora Enso, and Avery Dennison. According to ETF Database, WOOD recorded approximately $730 million in net inflows over the past year.
“For those priced out of the housing market, a timber ETF may offer a way to gain exposure to the long-term housing and construction story through a diversified, liquid investment vehicle,” said Kassam. “The key is understanding that you’re buying exposure to companies affected by housing-related demand, not direct ownership of land or residential real estate.”
Junyi Liu, Professor of Economics at Soka University of America, who researches international economics and development economics, said he has not seen signs of prosperity, but forests as an alternative asset do possess some unusual characteristics.
“Returns can come from biological growth, timber prices, and land appreciation, and owners can sometimes delay harvesting when timber prices are unfavorable,” Liu said. But he added that for retail investors, this is very different from the simple investment story of “trees growing on their own while you wait.”