The spiralling costs of building a new home and uncertainty around on-again and off-again tariffs are dragging down the United States’ building and construction industry. It comes as new data produced by the US Census Bureau reveals that spending on single-family homes and multifamily homes was down 1.1% (to $429 billion) and 0.1% (to $116 billion) in April – with private residential construction falling to just $893 billion, 0.9% down on March and 5% lower than in April 2024.
And whilst the industry is being propped up, to an extent, by an increase in public projects (up 0.5% to $514 billion)—especially in highways, streets (up 0.5%) and healthcare projects (up 3.3%)—Wood Central can reveal that total construction activity topped out at $2.15 trillion in April—0.4% lower than March and 0.5% lower than 12-months ago.
Last month, Wood Central reported that the housing supply is at a five-year high, more than 17% higher than 12 months ago. Despite the spring season traditionally driving a surge in purchases, existing home sales fell to a seasonally adjusted annual rate of 4,196,707 in April, the lowest level since October and down more than 1.1% from last year:
“Housing demand is sluggish because the cost of buying a home is climbing, and economic uncertainty is making many Americans press pause on big purchases,” according to Redfin, which published its latest report on housing availability last month. “The median home sale price rose 1.4% year over year to $438,466 in April. While that’s the slowest price growth in nearly two years, monthly housing payments still hit a record high last month due to elevated mortgage rates and prices. The average 30-year fixed mortgage rate was 6.73% in April. That’s up from 6.65% the prior month and more than double the record low hit during the pandemic, but down from 6.99% in April 2024.”
And whilst purchases are in decline, active listings—the total number of homes for sale—hit their highest level since March 2020, climbing 1.2% from March to April and 16.7% year over year: “A lot of people are selling their homes and downsizing because they’re worried about the economy,” said Meme Loggins, a Redfin Premier real estate agent in Portland, OR. “During the pandemic, everybody wanted more space for a home office or their kids to run around, but now people are more focused on saving money. A lot of folks are getting rid of their investment properties, and I’m working with a couple of federal employees who are afraid of losing their jobs, so they’re selling their homes and thinking of moving into condos.”
Lumber futures sink as panicked builders stockpile wood.
Early last month, Wood Central reported that limber futures dipped below $550 per thousand board feet—the first time since June 2024—as excess supply from winter restocking and panic buying over Trump’s tariffs collided with a 14.2% drop in US single-family housing starts, pushing new home inventories to nearly eight months of supply.
That is according to US trading platform Trading Views, which revealed that the 90-day pause on tariffs has removed the near-term urgency for buyers to cover import risks: “At the same time, expectations of sharply higher anti-dumping duties on Canadian lumber have prompted mills to hold back supply, further pressuring prices as domestic inventories accumulate and demand remains subdued despite the onset of the spring building season.”
It comes weeks after Rudolf van Rensburg, a director of Margules Groome Consulting, told Wood Central that the vast majority of primary and secondary timber products sidestepped Donald Trump’s tariffs, with huge volumes of rough and surfaced lumber, plywood, MDF, and other wood-based panels now subject to a national security probe that is due for release in a matter of days.
In March, lumber prices reached a 30-month high, peaking at $682 per thousand board feet, sparked by a “spooked” North American construction market panic buying in preparation for tariffs. This, in turn, led to on-the-spot prices for spruce-pine-fir (SPF) boards—used to build homes—and southern yellow pine (SYP)—a substitute for SPF in decking—rising to their highest levels in more than a year.
