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The effect of President Donald Trump’s 25% tariff on Canadian goods, including lumber, could trickle down to the Capital Region, although it may take time, according to Karen Profita, executive director of the Homebuilders Association of Greater Baton Rouge.
“I know there is a certain amount of lumber that they’ve already got in inventory,” Profita says. “There’s some of that soft wood, lumber that they need that is imported from Canada, and then also gypsum is used in drywall and that’s imported, too. Those are things we’re watching.”
She says that roughly 7% of all goods in new residential construction comes from another country.
Moreover, Todd Waguespack of Level Homes says around 30% of the builder’s lumber comes from Canada.
Of the $8.2 billion worth of sawmill and wood products imported to the U.S. in 2024, nearly 72% came from Canada, according to the National Association of Home Builders. The U.S. also imported $481 million worth of lime and gypsum products in 2024, with 74% originating from Mexico.
The White House issued two executive orders last month regarding domestic lumber production. The first order centers on the need to expand American timber production and the second directive examines whether imports of timber and lumber threaten national security. Profita also referenced the Fix Our Forests Act (H.R. 471), a legislative proposal aimed at addressing wildfire risks and forest management challenges in the U.S. The legislation passed the House in January but awaits Senate approval.
“That’s better forest management practices, which means we could start having more of that product here,” Profita says. “It’s not that we don’t necessarily have the capacity to grow that wood and have it, but we’ve got restrictions on harvesting it, so it’s about trying to find a responsible way to do that, where we can do more of that here.”
Like the other aspects of the real estate market, interest rates play a role in the homebuilding sector.
Interest rates affect construction costs and the tariffs have increased the price of lumber futures by 23.56% since the start of the year. Nationally, builders estimate an average cost increase of $9,200 per home due to recent tariff actions.
Moratoriums also present a challenge to the local homebuilding sector. Profita stresses the need to avoid moratoriums when it comes to affordable housing, which can impact tax revenues and community development.
“Talking to our members, I would say they’re generally optimistic,” she says. “Last year was just a tough year in real estate, so they’re feeling that pinch, and I think we’re prepared to handle that for a while. We sure would like to see that market open up a little bit more and be able to have housing at good pricing, so we can get more people into houses, too.”
