According to the National Association of Home Builders’ (NAHB) analysis of data from the Bureau of Labour Statistics, softwood lumber prices have hit their highest levels since September 2004, having jumped 13.4 per cent year-over-year in April, and climbed 10.4 per cent between January 2017 and April 2017.
Oriented strand board (OSB) prices rose by 4.4 per cent from March 2017 to April 2017, and a total of 25 per cent from April 2016 to April 2017. Prices for OSB are also at their highest since June 2013.
The NAHB has indicated that the main – or perhaps even one – driving factor behind the steady increase in prices could be due to the events related to the recent softwood lumber trade tariff standing at an average of 20 per cent the United States (U.S.) imposed on Canadian wood. Antidumping duties, another set of taxes, is expected to drop in June.
However, according to the NAHB, the recent price hikes brought about by the tariffs have the potential to affect the cost of a new home, adding an additional US$3,600, though the U.S. Lumber Coalition has instead released a smaller figure, at US$400 on US$6,000 based on the current cost of lumber to arrive at US$350,000 got a house. Another challenge regards the supply of wood – if Canadian mills start exporting to other countries rather than the U.S., homebuilders may be faced with a wood shortage unless domestic suppliers can increase their own production in time to cover the ensuing gap.
Nevertheless, the fill impact of the new tariffs and taxes may take up to six months – half a year – to be fully felt as many builders have settled on deals and agreements in anticipation of the imposed tariffs.
Sources: National Association of Home Builders’, U.S. Lumber Coalition, Construction Dive