US housing crisis - Homebuilders call out government

Trade association presses Biden administration to suspend lumber tariffs and ease regulations

US housing crisis - Homebuilders call out government

More than 10,000 members of the National Association of Home Builders (NAHB) have sounded the alarm on the “growing housing affordability crisis,” calling on the White House to take immediate action.

In a letter sent to President Biden Tuesday, NAHB representatives demanded urgent action to tackle the affordability crisis that is “pushing the housing market to an inflection point that threatens to derail the current housing and economic expansion.”

The association cited unprecedented price volatility in lumber prices, supply chain bottlenecks, soaring interest rates, excessive regulations, and a shortage of construction workers as the root causes of rising costs.

NAHB chairman Jerry Konter lamented that these issues have significantly decreased housing affordability, particularly for entry-level buyers and renters. According to NAHB, historically high lumber prices seen over recent months have raised the cost of a typical single-family home by more than $18,600 and added roughly $10,000 to the cost of a typical apartment since August 2021.

Read more: Lumber prices 2022 – soaring and adding to housing market woes

“Our members in every state across the land are clearly concerned that growing supply chain disruptions and worsening affordability conditions that are harming demand are weakening the housing market,” Konter said. “The industry believes these challenges will grow worse if meaningful steps are not taken to allow builders to increase the supply of affordable single-family and multifamily for-sale and for-rent housing. If the housing sector falters, the economy will surely follow.”

Further exacerbating lumber price fluctuations are the tariffs on Canadian lumber shipments into the US, which, NAHB said, act as a tax on American home buyers at a time when housing affordability is already at a more than 10-year low.

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“An important first step to address housing affordability challenges in this current high-inflation environment would be to immediately suspend tariffs on softwood lumber imports from Canada and move quickly to enter into negotiations with Canada to pursue a new, long-term softwood lumber agreement,” the letter stated.

Builders also pressed the Biden administration to address federal regulatory reform to reduce upward pressure on housing costs.

“Reducing burdensome regulations that account for nearly 25% of the price of building a single-family home and more than 30% of the cost of a typical multifamily development will provide more homeownership and rental housing opportunities for all Americans,” NAHB wrote in the letter.