US homebuilders urge Biden to help cut costs for market in ‘extreme duress’

The biggest U.S. housing industry group urged President Joe Biden to help reduce the cost of homebuilding, saying soaring prices and rising mortgage rates are putting the market “under extreme duress” and driving ownership out of reach for many Americans.

The National Association of Home Builders asked the White House to take action to address the supply-chain disruptions that are pushing up the costs of materials and labor, in a letter sent Wednesday. The group said the volatility in lumber prices alone has raised the cost of a typical single-family home by more than $18,600 since last August. Among its proposals are the suspension of tariffs on softwood imports from Canada.

“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,” said NAHB Chairman Jerry Konter. “If the housing sector falters, the economy will surely follow.”

The U.S. housing market has been on a tear during the pandemic, with low inventory, surging demand and the rising cost of building supplies combining to jack up prices. Concern that homes are becoming unaffordable has been heightened as the Federal Reserve pivots to aggressive interest-rate increases, sending mortgage rates above 5% to their highest levels since 2009.

As well as urging an end to Canadian lumber tariffs, the trade association called on Biden to pursue a new long-term agreement with the country. The U.S. earlier this year announced preliminary moves to lower some trade costs. But a final decision isn’t due until August, and Canadian producers will be paying average rates of 18% until then, according to British Columbia’s Lumber Trade Council.

The NAHB also asked the administration to reduce “burdensome regulations” that it says account for nearly 25% of the price of building a single-family home.

NAHB member firms are slated to construct about 80% of the new housing units projected for this year. The group’s gauge of homebuilder sentiment fell to a seven-month low in April as rising mortgage rates and high asking prices led to declines in sales and prospective buyer traffic.