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.

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In the interim, they are seeking to have the current tariffs rescinded while asking the president to move quickly on negotiating a settlement with the Canadian federal government as well as provincial governments in Canada to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

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

  • 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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