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housing got a bit of a reprieve from Trump's sweeping new tariff agenda. Looking here at some of the best performers that we can find in the market today. DR Horton, Lennar, those stocks up among others. Several key building materials are exempt from facing further tariffs at this point in time. But markets under pressure, worries about the global economy. How's the housing outlook shaping up as we move into the teeth of the spring selling season? Joining us now to discuss is Jim Tobin, CEO of the National Association of Home Builders. So Jim, let's just start with what you and your members have been talking about through the, you know, kind of the whole tariff discussion, where we're at, rates, the whole situation on how you stand as we enter, I guess a grand new era for US trade policy.

Yeah, a lot of uncertainty in trade policy. You know, in 2023, we used over $200 billion in building materials in this country and about 7% of that came from over our own borders. So trade policy is critically important. China, Canada, Mexico, in that order, are our largest building material trade partners, plus a lot of materials come from many other countries. So we are watching the tariff situation very carefully and working with the White House, talking to the White House about the uncertainty that we've created, not only in the macro economy, but also in the building material sector, which is critically important to building affordable housing in this country.

All right. So I think that we're short about 3 million homes relative to demand and demographic change in the United States economy right now. Give me your quick elevator pitch on how we would fix that.

Bill baby bill. It's pretty simple. The only way we are going to create a more housing affordability in this country is to build more housing. We've underbuilt since the Great Recession. This year, we're going to underbuild again. We're predicting about 1 million single family units this year, two to 300 multi-family units this year. We need to build about 1.5 to 1.6 million units, that's both single and multi-family, not only to meet household formation, immigration, and replacing older housing stock, the traditional drivers of building demand in this country. But then we've got to talk about that backlog that you cited. And the only way to do that is to get up to that trend line of one and a half to 1.6 million units. That's the only way we're going to do that. We need all levels of government to jump on board. We need to make sure that we can keep building material prices low. We need to extend the Trump tax cuts and we need a deregulatory environment that is really going to help reduce the regulatory burden on home creation in this country.

So many questions. How about a science question? Want to talk about lumber. I think that there's a misunderstanding that we can replace Canadian lumber with trees and lumber that comes from the US. Can you talk to us about why Canadian lumber is particularly necessary for home construction in the US and why it's different than US lumber?

We don't produce enough lumber in the United States to meet demand. We get about 30% of our lumber supply from over our shores and the bulk of it, about 70% of that 30%, comes from Canada. The species of wood that comes from Canada, specifically from their Northwest provinces, that is a preferred building material for studs and framing. That is, it is different than southern yellow pine, which is the predominant southeastern species of pine trees that we use. Now, we also have that particular Canadian species of lumber in our Pacific Northwest, but since the late 1990s, we have no longer cut and harvested timber off our national forests. In fact, in the late 1990s, we were pulling about 12 to 14 billion board feet off our national forests. Since then, we've treated our national forests like national parks. We've really slowed down timber production of our own domestic renewable resource on our forest service lands. Last year, we cut about two billion board feet. Guess where that delta of 10 billion board feet now comes from? Primarily Canada. So, while there is a preference for Canadian lumber, it's really a supply and demand issue. Until we cut enough and mill enough in the United States, we have to look over our own borders to meet demand for lumber in this country.

And, you know, Jim, last question for you. I want to talk about the immigration situation and the labor constraints that we've also seen in the housing market over the last, you know, years now. But sort of, what's that dynamic been like this year with some of the administration's new policies? And how your members are thinking about that constraint as well, with this potential, you know, with this built-in demand backlog as Joe was talking about.

Yeah, the construction industry continues to have a persistent labor shortage, about 200 to 300,000 jobs every month for the better part of a decade. We're just not bringing the next generation of men and women to work in the trades and train them in this country, whether it's starting in grammar school and high school, and moving through the trade schools after high school. So again, we've got to look at immigrant labor. About a third of the trades is immigrant labor right now. So when you talk about an immigration policy that is very constrictive, it is going to hurt our industry particularly hard. So we are watching that very closely as well. Of course, we believe in securing our borders and providing a pathway for people to come into this country to work in the construction industry. But right now, there is a lot of confusion in not only enforcement policy, but how are we going to bring people in? And that's only going to add to the cost of housing right now as well.

All right, Jim Tobin, CEO of the NAHB. Thanks for the time.