No matter who wins the presidential election on Tuesday, National Association of Home Builders CEO Jerry Howard said that lumber prices might be a wash.
Lumber prices have skyrocketed 160% since April because there is not enough domestic production, adding about $16,000 to the cost of building a new house, according to NAHB. But the different solutions each candidate might apply to the problem will likely balance the other out, Howard said.
“I think lumber prices would probably remain around the same and I’ll tell you why: If Trump wins, you’ll see a bigger effort to open up domestic harvests in our national forests and in the private forests,” Howard said. “But you probably won’t see the conclusion to the Canadian stuff with lumber prices.”
“If Biden wins, I think you’ll see more restriction on our domestic harvest. I don’t know this for sure, but possibly, he might be more amenable to dealing with the Canadian crisis.”
In September and October, builder confidence broke records, reaching 85 points in October – the highest score the series has ever recorded since its inception 35 years ago and the second month in its history the score broke 80.
Howard said that builder confidence could be affected by who wins the election, and the effects are likely to be outsized given such a polarizing election.
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“If President Trump wins, I think you’ll see it continue to rise or at least plateau, and that’s because our builders are very much pro-deregulation and they actually love what the president has done with deregulating things,” Howard said. “I think it would be more optimistic with a second Trump term.
“[If Biden wins] I think there is a very real fear that there will be higher taxes, that there will be a significant rollback of the Trump deregulation efforts. So I think you’d see a decline in builder confidence.”
Howard said with a Republican as president, there will more likely be “serious deregulation,” while a Democrat in the white house might mean a commitment in the form of subsidies and federal expenditures.
As for helping the housing inventory shortage, Howard said that both candidates are on the track to remedying the historic shortage.
“If President Trump is re-elected, I believe you’ll see him continue to try and deregulate all businesses in industries including housing, and that will help us build housing, obviously,” Howard said.
“If Biden is elected, and his housing policy is a moderate one that is pro-homeownership as well as – and he’s been talking a lot about housing, multifamily housing and rental housing for the lower-income spectrum – but if he has a more moderate approach than he can do something to help inventories.
“I think that our builders are more inclined to believe that President Trump will be better for them in that regard, but it really remains to be seen.”