Homebuilders group says lumber tariffs are raising home prices

By on April 8, 2018

(National Association of Homebuiders)

The Outer Banks Homebuilders Association is urging its members to contact members of Congress to urge repeal of the Trump Administration’s tariffs on Canadian soft lumber imports.

Rising lumber prices have already increased the average price of a single-family home by $6,388 since January of last year, according to the OBHBA and the National Association of Homebuilders.

Some of the increases are due to tariffs of more than 20 percent on Canadian softwood lumber shipments into the U.S.

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The NAHB points out that U.S. domestic production of softwood lumber is insufficient to meet the demand for construction of houses.

According to the NAHB, in 2016, the U.S. consumed 47.1 billion board feet of softwood lumber but domestic producers were only able to supply 32.8 billion, creating a shortfall of over 14 billion.

Canada supplied about 96 percent of the softwood lumber needed to make up that gap, and the tariffs have “acted as a tax” on American homebuyers, the NAHB contends.

Matt Neal, president of the Outer Banks Homebuilders Association.

Builders are turning to Russia and Germany to meet the shortfall, and the NAHB is urging elected officials and the Trump Administration to remove regulatory hurdles in the United States to boost domestic production. In addition, they are asking the federal government to open up new trade agreements with other nations, such as Chile, to reduce reliance on Canadian imports.

In the interim, they are seeking to have the current tariffs rescinded while asking the president to move quickly on negotiating a settlement with the Canadian federal government as well as provincial governments in Canada to resolve the current crisis.

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Homebuilding is one of the largest employers in Dare County and any increases in construction costs will exacerbate the current housing crisis in Dare County, where land and construction costs, combined with zoning issues have pushed housing prices beyond the reach of many of the county’s workers and middle-class residents.

Matt Neal, president of the Outer Banks Homebuilders Association, told the Voice “most builders here use Southern Yellow and other softwood pines and Canada has been a major supplier of the softwoods to local builders. We don’t see a lot of other wood like Douglas Fir or European Spruce in our area.”

Canada exports Southern Yellow Pine as well as other softwoods to the U.S. and other countries.

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Neal said the tariffs have increased costs about $2 per square foot for new construction framing packages, which would translate to about $6,000 to $8,000 for a 3,000-square-foot house, although these costs can vary among builders.

He said prices for the softwood pine haven’t been this high since 1995.

Neal pointed out that the tariffs aren’t the sole reason construction costs have increased.

“Windows, plywood and other materials have increased in prices over the past four years, in some cases on the order of 30 percent, so it’s not just tariffs that are causing construction costs to rise locally or nationally. Domestic demand was already rising, and add to that last year’s hurricanes and renewed construction globally, and prices have skyrocketed across the board.”

He said builders are looking to other sources for lumber, including Russia, they hope U.S. production also ramps up.

More information and how to contact legislators can be found on the NAHB website by clicking here.

Comments

  • Nick Willey

    Just like drilling off our coast; you get what you voted for.

    Sunday, Apr 8 @ 8:13 pm
  • John marks

    There is an excess of southern yellow pine saw timber in the southeast. We just need more sawmill capacity so it can be delivered in usable boards.

    Monday, Apr 9 @ 6:08 am
  • Carter McKay

    If a prospective homeowner can’t afford a modest increase of $6,388.00 then perhaps they shouldn’t buy a home in the first place. With interest rates on the rise, the long term cost of homeownership will certainly overshadow any short-term cost increase in construction.

    Remember the 2008 Financial Crisis and all the people that couldn’t afford a home?

    Monday, Apr 9 @ 7:46 am
  • dave

    Good job Trumpies!!

    Monday, Apr 9 @ 8:11 am
  • Cbruce

    @Nick Willey…aw shucks, you beat me to it. I bet Bev is thrilled and so proud of her hero.

    Monday, Apr 9 @ 8:23 am
  • Fulcher O'Neal

    The Outer Banks is overbuilt already! Why in the Hell would anyone want to build a house here of all places? Back in the day this place was a real paradise, but not anymore! Its overrun by convenience stores, drug stores, grocery stores, Wings on every corner, big ugly houses and the list goes on. People came here to get away from the hustle and bustle of city living. It was a place of wide open spaces, peace and quiet, scenic beauty, etc. but they destroyed that!

    Monday, Apr 9 @ 9:35 am
  • surf123

    You can push the blame around all you want, but the reality is we have had the short end of the trade stick for 30+ years. Finally we get someone in office who wants to put us on the same level as the rest of the world and everyone complains. I’ll equate it to getting punched in the face for 30 years and then deciding to put your arm up to block and then go on offensive.

    There may be long term consequences and it may get worse before it gets better, but at least we are no longer towing the line. I’ll take some higher prices now if the playing field is leveled in the future.

    Monday, Apr 9 @ 11:03 am
  • surf123

    @Fulcher O’Neal I completely agree it is overbuilt and has been for 20+ years. The stuff I visited and eventually moved here for is long gone. Those who have come here since the late 90’s have wrecked the Outer Banks of old. After decimating their beaches they move here and then want the same level of services and businesses they enjoyed at the beaches they destroyed. Every year more and more established older businesses disappear and more chain stores appear. Throw in an adult oriented store, businesses with sketchy names and images along with a ton of traffic and that is where we have sunk to.

    Monday, Apr 9 @ 11:07 am
  • Next?

    Coal miners, Farmers, Homebuilders whose next on line?

    Meanwhile “bankrupt” Jared gets 600 million loan from JP Morgan bank- seems if he couldn’t afford to purchase or maintain investment property then guess according to Carter he shouldn’t be buying properties either.

    And strange with all the tariffs and tweets(aside from manipulating the stock market) even here for the current challenge the go to immediate solution seems to be expanded trade with Russia.

    Monday, Apr 9 @ 11:25 am
  • Past Resident

    “Rising lumber prices have already increased the average price of a single-family home by $6,388 since January of last year, according to the OBHBA and the National Association of Homebuilders.”

    Did I miss something?? Didn’t the tariffs, only recently, come into play?

    Good lord people, get a life…

    Monday, Apr 9 @ 1:01 pm
  • Mike G

    I’ve never seen so many whinny business owners in my life. Everyone of these carpetbagging ‘locals” cry and whine about money 24/7. Its hilarious. If you can’t afford to be in business then leave !! Move back to Virginia or Maryland wherever. Croatan highway runs north and south. .

    Monday, Apr 9 @ 2:06 pm
  • Jon

    Past Resident, the lumber tariffs came into force late last year. You might be thinking about the more recent proposed tariffs for trade with China.

    https://www.heritage.org/taxes/commentary/tariffs-canadian-lumber-are-hurting-american-homebuyers

    The GOP used to favor free trade, but I don’t really know what their principles are anymore. Populist protectionism used to be the calling card of the Dems.

    Monday, Apr 9 @ 2:49 pm
  • Spoony Rae

    Lumber prices are increasing due to supply and demand; anyone remember the hurricanes from late last year, this is economics 101. All building materials have gone up over the last six months, not just lumber.

    Monday, Apr 9 @ 4:33 pm
  • 102

    Guys, do your home work. Here most of the framing lumber is yellow pine harvested in the south. Up north there is still alot of fir used, which some of which comes out of Canada. There has always been a tariff on gypsum which is the main component of sheet rock. Years ago we had a shortage of S.R. on the beach, called up Kempsville Lumber and got all the S.R. needed and delivered without a delivery fee because they needed to get it out of the warehouses. Sheet rock was $4.00 a board cheaper coming out of Va. and delivered and stocked properly without a delivery fee. Time to see if the folks supplying material are just trying to raise the price again.

    Monday, Apr 9 @ 5:11 pm
  • Mitch

    “When China joined the World Trade Organization in 2001, it promised to abide by the rules of the international trading order. Instead, it has broken every rule in the fair trade book on the way to expanding its annual gross domestic product from $1.3tn to $11.2tn. Meanwhile, since 2001, under the Bush and Obama presidencies, the US economy lost more than 60,000 factories and millions of manufacturing jobs.”

    Monday, Apr 9 @ 6:17 pm
  • Andy Moynahan

    $6000 for lumber $6000 for increase in insurance costs. Curritcuck bridge DOA. Opening the Ocean off our beach to oil drilling.

    It would seem that the people who are supposed to fighting for our interests could be doing better.

    Monday, Apr 9 @ 6:50 pm
  • Really?

    You are correct @Past Resident not enough time for tariffs to create this imaginary increase and if so how about the tariffs causing oil prices to drop which offsets any lumber increases. So maybe more expensive to purchase lumber from Canada but cheaper to deliver here. Liberals will always find something to complain about but can’t offer one single solution. @surf123 you are correct the liberals of today would cut off their nose to spite their face, complaining for the sake of complaining. Everyone wants stuff dirt cheap unless a republican came up with the idea, I mean is China really our friend??? I don’t think so!

    Monday, Apr 9 @ 9:00 pm
  • Mike G

    I’m glad to know that some intelligent people still reside in the obx. I’m referring to several common sense comments made above. Blaming trump for wood prices is the same kind of tactic that cost the democrats the White House. Eventually they will pick up on this. Last time I checked , billy boy Clinton signed it into law. He could of vetoed it. But didn’t

    Tuesday, Apr 10 @ 7:25 am
  • Rick

    @Jon, the GOP does favor free trade. When the other guy doesn’t, the Pres makes it a level playing field via tariffs. Not that I agree but that is just one way to make everyone play fair.

    Tuesday, Apr 10 @ 8:01 pm
  • tim

    I thought I heard the new tariffs, if they go into affect at all, won’t for 6 months. So is it like gas prices that go up on rumors and not actual costs?

    Wednesday, Apr 11 @ 1:38 pm
  • Roy Cobb

    Sounds like a political statement.
    6000 dollars is a problem for homebuilders? Some of us KNOW how much it costs for lumber to build a home and how much money these builders make.
    That is why so many of them have come here.
    I’d rather have American made products.

    Wednesday, Apr 18 @ 10:07 am

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