The Lumber Limbo

The United States is facing a housing shortage that continues to put upward pressure on home prices and limit access to affordable housing. According to the Up for Growth 2025 Housing Underproduction study, the country remains millions of homes short of meeting current demand - a gap that cannot be closed without increasing the pace and scale of home construction.

Meeting that need will require not just more building, but the right building materials. In residential construction, two primary lumber species underpin nearly all home building: Spruce-Pine-Fir (SPF) and Southern Yellow Pine (SYP).

These are not interchangeable commodities, they are complementary materials with distinct structural properties, regional availability, and performance characteristics.  

SPF, largely grown in Canada and the Pacific Northwest, is valued for its strength-to-weight ratio, dimensional stability, and ease of use in framing applications. SYP, produced primarily in the U.S. Southeast, offers high density and strength, making it well-suited for other structural and composite uses.  

Both are essential, and neither alone can meet the needs of the U.S. housing market. 

The U.S. homebuilding sector depends on a steady and predictable supply of both SPF and SYP to operate efficiently. While the U.S. produces the majority of its own lumber, particularly SYP, it does not produce enough SPF domestically to meet demand at scale. As a result, a highly integrated North American lumber supply chain has developed over decades, with Canadian producers supplying SPF critical for framing, U.S. mills supplying SYP and other domestic species, and builders relying on both to meet design, engineering, and cost requirements.  

This system is not redundant, it is interdependent. Efforts to substitute one species for another have proven limited in practice, as builders must meet code, engineering specifications, and performance standards that often require specific lumber types. When both supply streams are functioning, the system supports efficient construction, stable pricing, and the ability to scale housing production. 

With the expiration of the 2006–2015 Softwood Lumber Agreement, the current environment has reverted to a system of duties and tariffs. Today, Canadian softwood lumber entering the U.S. faces a combination of Countervailing Duties (CVD), Anti-Dumping (AD) duties, and Section 232 tariffs, bringing total rates to approximately 45%. While these measures were intended to support domestic production, their broader impact has been more complex. New domestic production is years away, and the U.S.’s regional ability to produce SPF in limited. 

In Canada, reduced access to the U.S. market has contributed to mill curtailments, closures, and job losses in forestry-dependent communities. In the U.S., higher duties have introduced price volatility and supply uncertainty into a system that depends on consistency and timing. For homebuilders, that uncertainty translates directly into risk: projects are delayed or scaled back, material costs fluctuate unpredictably, and financing becomes more difficult to secure.  

At a time when the U.S. needs to accelerate housing production, these dynamics are moving in the opposite direction. New home construction starts are significantly down despite the need.  

The U.S. requires roughly 30–33 billion board feet of lumber annually for housing construction, yet domestic production alone cannot fully meet that demand. Canadian lumber, particularly SPF, fills a critical portion of that gap. Tariffs and duties increase the cost of that supply, adding several thousand dollars to the cost of building a single-family home and compounding affordability challenges across millions of needed units. Across the full housing deficit, these incremental costs scale into tens of billions of dollars in additional construction expense.  

At the same time, market signals reinforce the importance of SPF: it has traded at a premium relative to SYP in recent years, builders continue to prioritize it for key framing applications, and substitution efforts have not fully closed the supply gap. The issue is not simply cost, but the availability of the right materials at the right time. 

The current system also includes an estimated $10 billion in collected duty deposits held pending resolution of ongoing disputes. While legal and trade processes continue, the housing market operates in the meantime under uncertainty. Historically, Canada and the United States have resolved lumber disputes through negotiated agreements that provide stability and predictability for both producers and consumers. A renewed framework could help restore balance to the market by reducing volatility in pricing and supply, supporting increased housing production, and reinforcing the integrated North American lumber system. 

Addressing the U.S. housing shortage will require building more homes efficiently. That cannot happen without both Canadian SPF and U.S. SYP. Efforts are underway on both sides of the border to better educate policymakers, regulators, and industry stakeholders about the distinct and complementary roles these materials play in home construction.  

U.S. lumber retailers, homebuilders, and suppliers have an important role to play in communicating these realities to members of Congress, the Office of the U.S. Trade Representative, and other decision-makers.  

The goal is not to favor one source over another, but to ensure a stable, reliable, and well-understood supply of the materials required to build the homes Americans need.