Whether you’re a home builder, seller, or looking to buy, the lumber market can drastically affect your project’s prospects. The COVID-19 pandemic has introduced much uncertainty to many areas of our lives, and the lumber industry is no different.
While many construction workers and lumber laborers saw less official work as a result of the pandemic shutdown, they certainly didn’t stop using their skills! Many tackled DIY home improvement projects and additions during their newfound free-time, enabling lumber to retain its value and even increase in price, in some cases.
Although this is great news for the lumber industry as a whole, those costs are frequently passed onto those looking to purchase a house. It is estimated that the high expense of wooden materials adds around $10,000-$15,000 to the price of a new home.
In an effort to mitigate the consequences of these skyrocketing sums, the United States has reduced tariff rates on imported Canadian softwood lumber. The duty rate has been around 20% since 2018, but was recently dropped to 9%. Although this will have immediate positive effects, like making new housing more affordable for buyers, there have been some mixed reactions.
The tariff was originally created to incentivize purchasing lumber from overseas sources, as opposed to turning to our friends from the north. Canada had previously been able to export lumber to the United States so cheaply that they virtually eradicated the appeal of any other source in the lumber industry. The U.S. Lumber Coalition fears that lowering the tariff rates on Canadian supplies may be a short-term solution to a much larger problem.
North American softwood lumber had already been seeing very high demand, unusual for this time of year. Although it fell as the holidays hit, it will be interesting to follow how the trends evolve following the New Year and its new legislation.