President Donald Trump issued tariffs against Europe, Mexico, China, and Canada among others. In retaliation, these countries also issue tariffs against US goods. One of particular interest is the tariff levied against Canadian lumbers. According to reports of various observes the Trump tariffs might have a major impact on real estate and the home mortgage industry.
Additional $9,000 per home
Tariff on Candian lumber is adding about $9,000 in additional cost per home in the United States. There is an increasing demand for housing because of the booming real estate industry. Since local lumber producers cannot keep up with the rate of demand, imported lumber is needed to give enough supply.
“The demand for lumber has been very, very strong, even with a 20.33% duty,” – Susan Yurkovich, president of the B.C. Lumber Trade Council.
Since there are tariffs on Candian lumber, this means that in order to make income prices need to be higher. Observers suggest that close to 1.3 Million people fall off out of the market. It is one of the major contributors to housing affordability, likewise on the homebuilding sector as an economic force.
The Next Course of Action on Trump Tariffs
Are tariffs better in place or are they just a burden? Are these Trump tariffs hurting the mortgage industry or helping the economy as a whole?
In our own opinion, all those sides in this issue should join hands and talk. Things like this can hurt the mortgage industry and worst the economy as a whole. Also, ensuring that our local homebuilders have access to enough lumber supply is a necessity for the mortgage and retail industry to flourish.
There will surely be ways to make housing more affordable and thereby encourage people to get more home loans. We should encourage steps and regulations that strengthen the industry and not hinder it.
Additional Reading: “Will the Dodd-Frank changes affect Lending and Mortgage?”
Reference: Housing Wire