2018 NAHB Chairman of the Board
2018 NAHB Chairman of the Board

This year, home builders have been encouraged to see larger numbers of consumers enter the housing market. With ongoing job creation, wage increases, and rising household formations, it’s expected that housing demand will continue to grow.

Builders want to provide the best quality homes for these consumers at competitive prices. Unfortunately, several supply-side hurdles block the way. One of the most significant challenges is the increasing costs of key building materials—specifically lumber, steel, and aluminum—because of tariffs on these items. These tariffs are hurting home builders and home buyers alike, and they are making housing less affordable for American families.

Tariffs averaging more than 20% on Canadian softwood lumber shipments into the U.S. are contributing to unprecedented price hikes. Since January 2017, the price of an average single-family home has risen by more than $7,000, and the market value of an average new multifamily housing unit has increased by more than $2,000 because of escalating lumber costs, among other factors. (These were the most current numbers at press time.)

This cannot continue. NAHB is encouraging the Trump administration to resume talks with Canada to find a long-term solution to this trade dispute so that we have access to a reliable supply of softwood lumber at reasonable prices. Builders can help by asking their U.S. congressional members to urge President Donald Trump to re-start softwood trade negotiations with Canada.

In conjunction with its effort on tariffs, NAHB is working with Congress and the Trump administration to increase domestic lumber production. The recent spending bill approved by Congress includes several reform measures that would reduce the red tape inhibiting our nation’s forestry professionals from harvesting timber from federally owned lands.

As the industry grapples with this 20% tariff on lumber, it also faces tariffs on steel and aluminum. On March 1, Trump announced that he would enforce a 25% tariff on steel imports and a 10% tariff on aluminum imports. These tariffs went into effect March 23. Similar to what has happened with lumber, the tariffs will translate into higher costs for consumers and businesses that use those products.

The price of structural steel was already on the rise. It rose more than 7% in the first quarter of 2018, the largest quarterly increase in seven years. Prices remain below the most recent peak in 2014. But if this pace continues, prices would exceed the 2014 peak by July 2018.

As with lumber, NAHB urges the administration to work quickly to resolve this trade dispute so that businesses and consumers have access to an adequate supply at a fair market price.

The NAHB is relying on its political clout to show the Trump administration and other officials how these tariffs are hurting our industry and the overall economy, and—most important—how they are putting the American dream of homeownership out of reach for many hardworking families.