Are you searching for a new home and struggling to find one you can afford? You might be surprised to learn one of the main reasons for today’s increasing home costs: the price of many types of framing lumber used to construct new homes has skyrocketed by more than 40 percent since the beginning of last year.
In fact, rising lumber prices – made worse by U.S. tariffs on Canadian lumber – have added thousands of dollars to the price of an average new home. This is making it much more difficult for millions of Americans to be able to afford to purchase a home of their own.
It’s important to understand how we got here so that necessary changes can be made to provide home builders with access to reasonably priced lumber and allow more families to achieve the American Dream of homeownership.
Domestic lumber production has not met our country’s demand for the past 50 years. Today, that means the United States must import about a third of the lumber we need. And more than 90 percent of our lumber imports come from Canada.
Even so, domestic lumber producers last year convinced the Commerce Department to impose tariffs averaging more than 20 percent on Canadian lumber shipments into the United States.
U.S. lumber companies claimed they were at a competitive disadvantage from Canadian lumber companies. In reality, domestic lumber production does not meet our demand. And the increasing lumber prices are unfairly benefiting lumber companies at the expense of American families and small businesses. That’s the real disadvantage.
The U.S. must return to the negotiating table with Canada to reach a new softwood lumber trade agreement that’s fair not only to U.S. and Canadian lumber companies but also to the other industries and consumers impacted by prices.
But that’s just the beginning. Since domestic lumber production cannot meet demand, it’s also important that the United States find ways to boost domestic production. This includes opening additional federal forest lands for logging in an environmentally sustainable manner.
Another solution is to reduce U.S. lumber exports. Despite the huge gap between U.S. lumber supply and demand, domestic producers are selling to China and other countries to increase their profits. This practice should be discouraged until we can meet domestic demand.
Home builders and home buyers in the Chattanooga area can learn more about the impact of lumber tariffs at www.nahb.org/lumber.