Hey, Mr. President, what about removing lumber tariffs to make homes affordable? | 2019-05-21

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After President Donald Trump announced at the National Association of Realtors convention on Friday that he was lifting aluminum and steel tariffs on Canada and Mexico, the National Association of Home Builders asked: What about lumber? 

Canadian softwood lumber used to build U.S. homes carry tariffs of about 20% imposed by the Trump administration two years ago. That adds $9,000 to the price of a typical new home and more than $3,000 to the value of a multifamily unit, NAHB said. At a time when all eyes are on U.S. housing affordability issues, the trade dispute with Canada is “needlessly driving up housing costs,” Greg Ugalde, chairman of NAHB, said in a statement issued after the president’s speech. 

“A prompt resolution to this ongoing trade conflict with our neighbor to the north will help to ease ongoing housing affordability concerns,” Ugalde said.

Softwood lumber from Canada is used for framing homes and for finishing interior spaces, such as trim around windows and doors. The two countries in 2006 signed a trade pact, the Lumber Softwood Agreement, that expired in 2015 without a replacement. In 2017, Trump imposed tariffs on Canadian lumber imports. 

In 2012, a typical family could afford 77.5% of all new and existing homes sold, according to the NAHB/Wells Fargo Housing Opportunity Index. Today, that share is at a 10-year low of 61.4%. 

Housing affordability benefits from free trade,” said NAHB Chief Economist Robert Dietz. “To improve housing affordability, we really need to bend the cost curve, and that means finding ways to reduce construction costs.”

In the first quarter, first-time homebuyers had 102% of the income needed to buy a median-priced starter home, according to NAR’s housing affordability index. That’s down from 105% a year earlier, and down from 110% in 2016.



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