Additional trouble may lie ahead for the U.S. home building industry. As the tide of commodity prices turns, lumber prices are soaring — over the past year softwood lumber prices have risen 23%. Lumber has only narrowly escaped the latest torrent of tariffs. Even though the surprise withdrawal of the Trump administration big footed that discussion, it has left builders and market analysts alike wary of its long term implications.
By April 2025, softwood lumber prices had reached record levels. This explosion led to a stratospheric increase in lumber futures for the first quarter of the year. Fears that Congress will raise the duty on imports is behind this alarming trend. Further, fears of sawmill shutdowns throughout North America are adding to the combustible supply chain pressure cooker. The ability for this recent and unexpected volatility in lumber prices to sharply increase the construction costs and timelines for new housing projects should not be underestimated.
Canada is a major presence in the U.S. lumber market, representing on average 85% of all softwood lumber imports. The country is an extremely important U.S. supplier. Indeed, it accounted for almost 25 percent of the entire softwood lumber supply at the disposal of U.S. Any new supply chain disruption would further aggravate the crisis. This would result in even more price increases and longer timelines for building new homes.
Industry experts caution that continued surges in lumber prices will eventually undermine the new homes’ affordability. Persisting price trends or continued increases could lead to difficult decisions for builders on whether to move forward with projects. Even worse, homebuyers are dealing with 8 percent mortgage rates today. These exorbitant costs are driving up the difficulties to attain home ownership.
While the administration keeps a close eye on these lumber dynamics, everybody connected to the housing market will be watching just as keenly. Tariffs, material supply constraints, labor supply, and rapidly shifting costs are regularly shaping today’s construction landscape. This unpredictability may profoundly affect the future of home building in the U.S.