Lumber Shortages Affecting Housing Affordability
Jeremy Vorndran, President, North Coast Building Industry Association
As the nation fights to rebound from the effects of the COVID-19 pandemic, housing has been a bright spot for the U.S. economy, particularly single-family construction, with permits running 3.4% higher during the first half of 2020 compared to the first half of 2019.
When combined with better-than-expected housing demand and home building activity, along with projects being done by the DIY segment, builders are seeing shortages of lumber resulting in an 80 percent increase in lumber prices since mid-April. Framing lumber prices reached a record high in late July, while oriented strand board prices have increased 138% over the past year. These sharp increases are unsustainable, particularly in the light of the housing affordability crisis.
The housing industry has a growing concern and is seeking prompt action regarding soaring lumber prices and supply shortages that are harming the housing sector of the economy; hence the National Association of Home Builders (NAHB) sent a letter to President Trump expressing these concerns.
NAHB is urging the White House to play a constructive role to alleviate this growing threat to housing and the economy by calling on domestic lumber producers to ramp up production to ease growing shortages and making it a priority to work with Canada on a new softwood lumber agreement that would end tariffs averaging more than 20% on Canadian lumber shipments into the United States.
NAHB’s letter to the White House stressed that housing can do its part to create jobs and lead the economy forward; but in order to do so, we need to address skyrocketing lumber prices and chronic shortages.
A similar letter was also sent to Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer and Zoltan van Heyningen, executive director of the U.S. Lumber Coalition.
Housing affordability affects everyone. When everyone in your community has access to safe, affordable housing, your community thrives — economically, physically, and socially. Safe homes provide healthier living environments for all generations. People are better able to work where they live. And everyone can engage in the community.
This shortage along with a limited supply of land, a shortage of skilled labor are all contributing to higher prices and rents. The result? Americans are struggling to afford one of the most basic human needs — shelter.
Addressing the housing affordability crisis and supporting new residential construction will make our communities stronger, more inclusive, and more economically competitive, while boosting local tax bases.
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