The U.S. residential construction industry relies on a large number of building materials sourced from Mexico and Canada.

The U.S.-Mexico-Canada Agreement will help to ease the nation’s housing shortage by stabilizing the prices of materials used in construction, according to the National Association of Home Builders. The new trade pact was approved recently. The U.S. is Canada’s biggest export market for softwood lumber, primarily used for home construction. “The U.S. residential construction and remodeling industries rely on tens of billions of dollars in building materials sourced from Mexico and Canada annually because America cannot produce enough steel, aluminum and other materials and equipment to meet the needs of the domestic housing industry,” NAHB said in a statement. The U.S. housing market is struggling with an inventory shortage that has depressed sales. The so-called “month’s supply” number that measures how long it would take to sell off the existing stock of homes fell to 3.7 in November, according to the National Association of Realtors. Most economists consider a six-month supply to be a balanced market. While some of the supply shortage can be blamed on factors like Baby Boomers aging in place, it’s also due to depressed levels of home building, indicated NAR Chief Economist Lawrence Yun. Homebuilders still haven’t recovered from the housing bust a decade ago, Yun said in an interview. There were approximately 900,000 single-family housing starts in 2019, which isn’t enough to keep pace with population expansion, he said. 

Source: HousingWire