Homebuilders are quickly feeling the impact of the looming rise in Canadian lumber tariffs, as more homebuilders are concerned about the availability of building materials.
According to the May 2017 survey for the NAHB/Wells Fargo Housing Market Index, the availability of building materials, especially framing lumber, significantly jumped on the list of homebuilder concerns, revealing that 21% of single-family builder respondents reported a shortage of framing lumber.
“It is certainly concerning that we have seen such a large jump in reported framing lumber shortages in a relatively short period of time,” said National Association of Home Builders Chief Economist Robert Dietz. “The rising reports of shortages along with the recent increases in softwood lumber prices, can almost certainly be related to the ongoing softwood lumber trade dispute between the U.S. and Canada.”
At the end of June, U.S. Secretary of Commerce Wilbur Ross announced another proposed Canadian lumber tariff in addition to the tariff the Trump administration announced in April on Canadian softwood lumber imported into the U.S.
The problem is that the U.S. is in an extreme deficiency of lumber and depends on lumber from Canada. NAHB crunched the numbers and found that in 2016, the U.S. consumed more than 47 billion board feet (bbf), while it produced slightly more than 32 bbf. As a result, the U.S. heavily relies on foreign sources of lumber, and Canada makes up for 96% of this domestic shortfall.