2 min read
Navigating the US Housing Market: Positive Trends and Regulatory Challenges
Audrey Dixon
:
Feb 3, '25

January’s US housing market data was largely positive, which is usually a good sign for the North American softwood lumber industry.
However, certain actions and statements of the US president in the first few days of the new administration have largely overshadowed the news of increased housing starts, improved remodeling activity, and an uptick in builder confidence.
NAHB's Response and Challenges
In the flood of executive orders signed in the first days of the new presidency, one included directing the heads of all executive departments and agencies to take action to “lower the cost of housing and expand housing supply” as well as reduce other household expenses and boost employment.
Albeit low on detail, that seems to have reassured the National Association of Home Builders (NAHB) that addressing housing affordability is still a federal government priority. In a release welcoming the executive order, the NAHB provided a link to its May 2024 blueprint to address the US Housing Affordability Crisis. The first three points of NAHB’s 10-point plan are:
- Eliminate excessive regulations
- Promote careers in skilled trades
- Fix building material supply chains and ease costs.
Point 1 is near the top of the new administration’s priorities. However, the new president’s positions on immigration and threatening key trading partners with tariffs could make the next two NAHB goals more challenging. Point 2 calls for the adoption of “sensible immigration policies that preserve and expand existing temporary work visa programs while also creating new market-based visa programs that will accurately match demand with available labor.” Point 3 specifically mentions high lumber prices hiking the price of new US homes and calls for “ending tariffs on Canadian lumber shipments into the US and on building materials coming from China.”
Impact of Tariffs on the North American Lumber Market
A fact not always understood by politicians is that US softwood lumber production cannot meet domestic demand. In the first 10 months of 2024, US lumber production met only 72% of US softwood lumber consumption, while Canadian lumber imports accounted for 24%.
Not surprisingly, the threat of a 25% tariff on Canadian imports from February 1 has already rattled the North American lumber market. Major Canadian lumber producers have reportedly announced that price hikes will be immediate if a tariff is imposed. Industry watchers are concerned there will be panic buying in the US over the next few weeks, causing runaway prices and upending the market into the spring.
Canadian softwood lumber exporters to the US already pay hefty duties, which are expected to rise further in 2025. If additional tariffs are implemented on Canadian lumber imports, some capacity could exit the US market permanently, particularly if some already struggling Canadian sawmills are forced to close. Most US homebuilders will pass on tariff-burdened higher material costs to consumers, and if those early signs of an improving US housing market increase lumber demand, prices can be expected to rise for both builders and for US consumers, according to a new market insight from ResourceWise.
Uncover Market Insights on North American Lumber Tariffs
To learn more about the potential ramifications of tariffs on the lumber market, download ResourceWise's latest Market Insight's Report, 'North American Lumber Market Has the Jitters as Threat of Imminent Import Tariffs on Canada Brings Warnings of Price Hikes and a Turbulent Spring.' The report provides a comprehensive analysis of how these tariffs could reshape market dynamics, affecting pricing, supply chains, and competitive positioning.