The proposed US tariff on Canadian softwood lumber would add an estimated U$850 to the cost of an average American home.
That’s the view of credit ratings agency Fitch which calculated that a builder might spend $15,000 on lumber for a single-family home with 28 per cent of the wood coming from Canada.
On that basis, Fitch says that the impact of the tariffs would be felt most by first-time buyers, already battling against high prices and rising interest rates.
Fitch points out that lumber prices have already been increasing and are up 22 per cent since the start of the year.
The agency warns that housing affordability, exacerbated by rising costs of materials and labor, is likely to be reduced by rising mortgage costs. That, it says, could limit the ability of builders to increase costs.
Reduced margins for builders could lead to supply being delayed, worsening the affordability in tight-supply markets.
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