More than 10,000 members of the National Association of Home Builders (NAHB) sent a letter to President Biden calling on the White House to take immediate action as the growing housing affordability crisis is pushing the housing market to an inflection point that threatens to derail the current housing and economic expansion.
Rising costs stemming from historically high price levels for lumber and other building materials, supply chain bottlenecks, surging interest rates, excessive regulations and a persistent lack of construction workers have significantly decreased housing affordability conditions, particularly for entry-level buyers and renters.
“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,” said NAHB Chairman Jerry Konter, a home builder and developer from Savannah, Ga. “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 affordability woes is the unprecedented price volatility in lumber prices that has raised the cost of a typical single-family home by more than $18,600 and added approximately $10,000 to the cost of a typical apartment since last August. Tariffs on Canadian lumber shipments into the U.S. are further fueling this price volatility and acting as a tax on American home buyers at a time when housing affordability is already at a more than 10-year low, according to the latest data from the NAHB/Wells Fargo Housing Opportunity Index.
“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 to move quickly to enter into negotiations with Canada to pursue a new, long-term softwood lumber agreement,” the letter to Biden stated.
Builders also called on the White House 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,” the letter said.