Your new house could cost less if the U.S. and Canada keep working through their lumber trade dispute – Oklahoman.com

by Richard Mize

Published: Thu, December 3, 2020 1:04 AM Updated: Thu, December 3, 2020 1:19 AM

Skyrocketing lumber prices have added $10,000-$15,000 on average to the cost of a new house, so a reduction in duties on Canadian imports has local as well as international impact.

The rapid runup in prices this year caught builders by surprise "with each builder managing the price increase in different ways," said Andrew French, president of the Central Oklahoma Home Builders Association. "The most common responses across the board that I've seen are builders are either raising their home prices or letting already-poured slabs sit in anticipation of lumber coming down."

Prices won't come down enough based on the tariff reduction alone, said Chuck Fowke, chairman of the National Association of Home Builders and a custom homebuilder in Tampa, Florida.

"The Commerce Department's action to reduce duties from more than 20% to 9% on softwood lumber shipments from Canada into the U.S. is a positive development, but more needs to be done," Fowke said in a statement this week. "Tariffs have contributed to unprecedented price volatility in the lumber market in 2020, leading to upward pressure on prices and harming housing affordability for American consumers.

"The U.S. needs to work with Canada to end the tariffs and achieve a long-term, stable solution in lumber trade that provides for a consistent and fairly priced supply of lumber."

The tariff dispute became acute as the demand for houses, and therefore lumber, soared even as the coronavirus hit and stayed. The lowest mortgage interest rates on record, aided perhaps by a renewed appreciation for domestic life due to stay-at-home orders and the work-from-home movement, fueled demand for both new and previously owned homes.

Unexpected demand came just as supplies of lumber and other building materials grew scarce and supply chains were disrupted due to plant shutdowns, then slowdowns related to social-distancing requirements, said Jim Schuff, co-owner of Vesta Homes in Moore.

It could have been worse both for homebuilders and homebuyers, said Caleb McCaleb, owner of McCaleb Homes in Edmond.

Read more:
Your new house could cost less if the U.S. and Canada keep working through their lumber trade dispute - Oklahoman.com