The U.S. Commerce Department seems to have followed the age-old adage “measure twice, cut once” in its decision earlier this month to reduce tariffs on Canadian lumber from 20 percent to 9 percent.

As Contractor News has previously reported, the price of lumber went up 50 percent between April and July “largely driven by lumber mills closing or reducing output and demand being higher than expected.”

Market analysts have largely been proven wrong in their predictions about how the coronavirus would affect the price of lumber, with a massive surge of Do-It-Yourself projects across the US keeping the demand for lumber high despite the coinciding influx of work stoppages.

Prices peaked in August. Lumber futures reached record highs on August 24, with futures prices at $810.3. They dipped back down to $484 on October 27, but have started to rise again since. As of the writing of this article, they’re back up to $635.2.

“The Commerce Department’s action to reduce duties from more than 20% to 9% on softwood lumber shipments from Canada into the U.S. is a positive development, but more needs to be done,” said National Association of Home Builders Chairman Chuck Fowke. “Tariffs have contributed to unprecedented price volatility in the lumber market in 2020, leading to upward pressure on prices and harming housing affordability for American consumers. The U.S. needs to work with Canada to end the tariffs and achieve a long-term, stable solution in lumber trade that provides for a consistent and fairly priced supply of lumber.”

With markets so uncertain, this tariff draw-down will no doubt help stabilize things for consumers and professional builders alike.

This is good news as young couples flee to the suburbs to mitigate pandemic related inconveniences and find that there are few homes actually on the market. Single-family home construction is soaring, especially in the South. As Market Watch reported last month, citing Census Bureau statistics, construction of new homes increased 4.9 percent in October over the previous month. 

While demand for large homes in the suburbs with large yards is high and supplies are in, well, short supply -- as is skilled labor -- home construction companies are finding themselves in a bit of a tight spot. But economists say the position these companies are in is actually enviable as other industries have faced much greater straints from the pandemic and the recession. According to MarketWatch home construction is in as much demand now as it was following the Great Recession of 2008.