While United Steelworkers are singing the praises of the President’s steel and aluminum tariffs, the National Association of Home Builders will tell you a completely different story. They actually sat down with Commerce Secretary Wilbur Ross a couple of weeks ago to discuss the growing problem of escalating lumber prices that are being exacerbated by tariffs on Canadian lumber imports into the U.S.
Randy Noel serves a Chairman of the National Association of Home Builders. He himself is a custom home builder from Louisiana. After meeting with Ross in Washington, Noel said, “We discussed our mutual concern that lumber prices have risen sharply higher than the tariff rate would indicate, and that this is hurting housing affordability in markets across the nation.” He added, “Rising lumber prices have increased the price of an average single-family home by nearly $9,000 and added more than $3,000 to the price of the average multifamily unit.”
Noel and his colleagues in the home building industry applauded the Secretary of Commerce for “acknowledging the gravity” of the situation and expressing his willingness to look into the possibility that factors other than the tariff may be manipulating the market.
Noel says, “We also encouraged the secretary to return to the negotiating table with Canada,” terming it “essential” that the talks resume in an attempt to hammer out a long-term solution. The contractors are seeking to “ensure U.S. home builders have access to a stable supply of lumber at reasonable prices to keep housing affordable for hard-working American families.”
Earlier in the spring a New England contractor, Jack Dawley, immediately felt the impact when he received an e-mail from a vendor that provides white cedar shingles for a development he’s working on along the Eastern Seaboard. As a Canadian import, the cedar shingles were hit with a 20.8-percent duty imposed by the U.S. government as part of the ongoing trade disputes.
That alone added an additional $1,400 per unit for the 12 homes planned for the next phase of construction according to the report from the National Association of Home Builders. One serious problem with that is that half of the units had already been sold.
Dawley was quoted at the time of that incident in April as saying, “What Americans and our administration need to understand is that, at a minimum, a third of the U.S. supply of dimensional framing lumber and 100-percent of read and white cedar shingles come from Canada.”
He also noted that the simple fact is that the U.S. simply does not produce what it consumer, and our economy relies on the rational importation of certain goods.
A study this spring by the National Association of Home Builders economists showed that the increase in the cost of lumber since the beginning of 2017 has been enough to drive up the price of an average new single-family home by $6,388, and the market value of an average new multifamily housing unit by $2,430.
Stay tuned.
