Some of the biggest lumber producers in the U.S. southeast are Canadian.

Drawn to the region’s abundance of fast-growing timber, low log prices, and proximity to major housing markets, Canadian companies’ share of lumber production in eight southeastern states has quietly grown to 25% from just 3% a decade ago, according to Forest Economic Advisors LLC.

The influx came amid a retrenchment from the U.S. southeast by some big domestic players. It was also spurred by a beetle infestation in British Columbia, which led many producers based in the province to look further afield for new sources of timber.

“It all starts with the trees,” Larry Hughes, chief financial officer for Vancouver-based West Fraser Timber Co., said in an interview this month. “What really attracted us, and I think it’s attracting other Canadians, is the wood basket.”

West Fraser was one of the first Canadian companies to bet big on the region, acquiring 13 sawmills from International Paper Co. back in 2007, adding to its two existing mills in the region. Now, a resurgent U.S. housing market bodes especially well for West Fraser, and for other Canadian firms with a significant presence in the region, including Interfor Corp. and Canfor Corp.

U.S. housing starts rose 0.2% in July, hitting an annual rate of 1.2 million units, their highest level since October 2007. That increase followed a 12.3% jump in June housing starts. If that continues, said Henry Spelter, a partner with Forest Economic Advisors, LLC, Canadian companies “will be in a very good position.”

“If you compare the average margin in the south for a typical, average mill with that in the Pacific Northwest,” Mr. Spelter said, “the last couple of years have seen much superior returns for southern mills.”

And there’s still room to grow.

Georgia alone boasts around 22 million acres of privately owned timberland that can be exploited commercially. Much of it was left relatively untouched in the years following the housing crisis. And a few years of unimpeded growth makes a big difference in the area, where trees mature at a pace of about 25 to 30 years, compared with 80 to 100 years for trees in British Columbia.

“When you take out two or three or four years [of harvesting] … because of the recession, there’s a big bulge of growth that suddenly appears and depresses the market,” said Mr. Spelter.

That environment made the U.S. southeast an attractive low-cost area for expansion, and coincided with a strong Canadian dollar that made shopping for assets in the U.S. more affordable. While Canadian firms were expanding in the area, some U.S. firms were exiting. Both Louisiana-Pacific Corp. and Boise Cascade Co. no longer own any southern timberland. Meanwhile, one of the area’s remaining big lumber companies, Weyerhauser Co., has reduced operations, though it and Koch Industries’ Georgia-Pacific Corp., still have a significant presence in the region.

The Canadian dollar has fallen sharply versus the U.S. dollar recently, but the region is likely to continue to draw Canadian firms, observers say.

One reason: attractive log costs. Pine sawtimber prices for the southern market were $25.60 a ton in the second quarter, up 37 cents from a year earlier, but still down about $15 from a decade ago, according to Timber Mart-South, a not-for-profit journal that charts timber prices in the southeastern states.

Canadian mills operating in the U.S. are generating “huge margins” with log prices at current levels as the U.S. housing market rebounds, said Russell Taylor, president of Vancouver-based International Wood Markets Group Inc., a consulting firm. The profits being generated could go toward buying more U.S. mills or to fixing up Canadian mills, he said, adding Canadian firms have “got huge buying power” despite the lower Canadian dollar.

Interfor, also of Vancouver, is “continuing to look at all opportunities,” the company’s senior vice president of corporate development and strategy, Marty Juravsky, said in an interview last month.

Interfor made its first move into the U.S. southeast in March 2013, acquiring three sawmills from Florida-based Rayonier Inc. It has since acquired four more Georgia mills and another in South Carolina. In June, the company added a sawmill in Arkansas, marking its ninth acquisition in the region in little over two years. Last year, 37% of its production came from the U.S. south. This year, it expects that to be around 40%.

“The timing of their acquisitions was very good,” said Steve McWilliams, president of the Georgia Forestry Association.

Canadian firms’ options for growth at home are more limited. British Columbia was hard hit by a mountain pine beetle infestation that began in the late 1990s and whose devastating impact lingers. A 2013 report from the British Columbia government estimates that about half of the province’s pine volume would be dead by 2017, at which point the infestation was expected to taper off.