Canadian Lumber Tariff Expected to Raise Home-Building Costs

Home buyers are likely to pay the cost of a recent decision by the U.S. Commerce Department.

2 minute read

April 25, 2017, 12:00 PM PDT

By James Brasuell @CasualBrasuell


Construction

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Peter Baker and Ian Austen report: "The Trump administration announced on Monday that it would impose new tariffs on Canadian softwood lumber imports, escalating a longstanding conflict with America’s second-largest trading partner."

"The United States imported $5.7 billion in softwood lumber last year alone, mainly for residential home building," according to the article, which focuses mostly on the trade implications of the Commerce Department's decision to impose the tariff.

In a separate article, Chris Kirkham and Sarah Nassauer dig into the implications of the tariff for the U.S. home-building industry, which they say "has struggled with higher labor costs since the housing crash a decade ago." Here, the reporters explain how lumber fits into the total cost of new homes:

Based on analysis last year, a builder spends an average of $15,413 for the softwood lumber in a single-family home, or about 7% of the total construction cost of a home. Lumber cost increases so far this year have added an estimated $3,000 to the cost of building a typical home, according to the home builders’ association.

Lumber costs are already higher than they have been in a decade, according to the article.

Another article by Diana Olick calculates the expected cost U.S. home buyers will likely pay to cover the new tariff. Based on calculations by the National Association of Home Builders, homebuyers will increase Canadian lumber costs by 6.4 percent, or another $1,236 to the cost of an average single-family home.

Monday, April 24, 2017 in The New York Times

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