Page 28 - BB_Jun_2018

Rising Prices

of Lumber and

Steel a “Terrible

Downward Sprial’

Hefty tariffs on Canadian softwood lumber sell for 12-15% less just because of the tariffs on
imports are causing lumber prices to skyrocket imports? That’s not going to happen. All of the
and making many home builders pray for a prices will rise no matter where it’s coming from.”
prolonged price plateau. DePhillips calls the impact of rising materials
Will it be long before more builders start using prices a “terrible downward spiral” that is driving
alternative materials to lumber? Steel-framed up the cost of new homes. For many consumers,
homes make up a very small portion of the higher costs might deter them from buying a
overall market, but that may change as prices home. And for some builders, it might prevent
shift. them from selling more homes.
“Steel is slightly more expensive [than softwood to the point they can’t get appraisals to satisfy
lumber] at this point,” says Vic DePhillips of a sales price? At this point, we don’t know. But it’s
Steel Modular Systems in Bloomsburg, Penn. a serious threat to our industry,” DePhillips said.
“But if prices for softwoods keep going the way
they are, steel might soon be the less expensive
option.”

That is, only if steel doesn’t get a similar tariff
treatment to that of lumber. Late last month,
the Trump administration decided to delay
imposing a substantial 25% tariff on imported
steel until at least June 1.
While the tariffs are said to be part of a strategy
to protect domestic industries, many like
DePhillips don’t see it that way.
“Whatever happens with steel, it will be the
same as what’s happening with the softwood
market: As soon as we put a tariff on [these
imports], all the domestic suppliers raise their
prices, too,” DePhillips said.
“You mean to tell me that U.S. Steel is going to

28 JUNE 2018 | GREATER SAN ANTONIO BUILDERS ASSOCIATION