<ul class="summary-list"><li>Sens. <keyword id="357299" type="PERSON" weightage="60" keywordseo="Mazie-Hirono">Mazie Hirono</keyword> and <keyword id="1368638" type="PERSON" weightage="60" keywordseo="Tammy-Duckworth">Tammy Duckworth</keyword> successfully lobbied the White House for increased <keyword id="219355" type="COMPANY" weightage="60" keywordseo="AAPI">AAPI</keyword> representation.</li><li>The pair threatened to withhold votes in support of Cabinet nominees unless Biden made changes.</li><li>The White House said it would add a senior-level AAPI liaison.</li></ul>The Biden administration says it will appoint an Asian American Pacific Islander liaison after Sens. Tammy Duckworth and Mazie Hirono decried the lack of AAPI representation at the highest levels of government and threatened to block future administration nominees unless Biden pledged more representation.Duckworth, of Illinois, and Hirono, of Hawaii, are the only two AAPI members of the Senate and had been raising the issue of representation for months but had been met with little support, <a href="https://www.nytimes.com/2021/03/23/us/politics/duckworth-hirono-biden-nominees.html">according to The New York Times</a>,During a tense call on Monday night with the White House, Duckworth was told by White House Deputy Chief of Staff Jen O'Malley Dillon that Vice President Kamala Harris was proof enough of high-level AAPI representation, according to <a href="https://www.cnn.com/2021/03/23/politics/duckworth-hirono-aapi-nominees/index.html">CNN</a>.Duckworth called Dillon's comments "insulting.""To be told that you have Kamala Harris, we are very proud of her, you don't need anybody else, is insulting," Duckworth told reporters following the meeting. "That's not something you would say to the Black caucus - that you have Kamala - we're not going to be putting any African Americans in the Cabinet - why would you say that to AAPIs?"Duckworth added that until the White House "can call me and tell me what the proposal is," she would be a "no vote on the floor, on all non-diversity nominees."Hirono echoed Duckworth's sentiments. "Tammy's position is that until she gets a commitment from the White House that there will be more diversity representation in the Cabinet and senior White House advisory positions, she will not vote to confirm anyone who does not represent diversity," Hirono told <a href="https://www.msnbc.com/deadline-white-house/watch/sen-hirono-is-prepared-to-join-sen-duckworth-in-opposing-biden-nominees-until-there-s-more-diversity-108986949621">MSNBC</a>. "This is not about pitting one diversity group against another. I think this is a well-articulated, focused position. I am prepared to join her in that."The <a href="https://capac-chu.house.gov/">Asian Pacific American Caucus</a> had previously applauded the confirmation of Dr. Vivek Murthy as Surgeon General and Katherine Tai as US Trade Representative, but Hirono and Duckworth questioned why there are no AAPI members in top leadership roles in Biden's Cabinet.With the Senate currently split evenly between Democrats and Republicans, Duckworth and Hirono's support for Biden nominations is crucial. On Tuesday, the White House spoke privately with Hirono and Duckworth. Following the conversation, both women reversed course. Ben Garmisa, a spokesperson for Duckworth, said the senator appreciated "assurances" that the Biden administration would "do more to elevate AAPI voices and perspectives at the highest levels of government" and that Duckworth "will not stand in the way of President Biden's qualified nominees - which will include more AAPI leaders."Hirono said on <a href="https://twitter.com/maziehirono/status/1374560562231795713">Twitter</a> that after a "productive" and "private" conversation with the White House, she would "continue voting to confirm the historic and highly qualified nominees President Biden has appointed to serve in his administration."White House press secretary Jen Psaki said in a statement to the Times on Tuesday night that "the White House will add a senior-level Asian American Pacific Islander liaison, who will ensure the community's voice is further represented and heard.""The president has made it clear that his administration will reflect the diversity of the country. That has always been, and remains, our goal," she continued. The White House's announcement comes amid a spike in <a href="https://www.insider.com/hate-incidents-against-asian-americans-have-skyrocketed-2021-2">anti-Asian hate crimes</a> in the US believed to be related to unfounded COVID-19 conspiracies. Last year, Hirono, along with several other AAPI members of Congress, introduced the <a href="https://www.congress.gov/bill/116th-congress/house-bill/6721">COVID-19 Hate Crimes Act</a> which would allocate Department of Justice resources toward reviewing hate crimes.

After 2 senators threatened to withhold votes in support of nominees, the Biden administration pledges increased Asian American representation

<ul class="summary-list"><li>The supply chain crisis is one of 2021's biggest stories, but it can be traced back to the last decade.</li><li>The US-China "<keyword id="12277786" type="UNKNOWN" weightage="60" keywordseo="trade-war" source="Orion">trade war</keyword>" of the Trump years included <keyword id="12002670" type="UNKNOWN" weightage="60" keywordseo="semiconductor-chips" source="Orion">semiconductor chips</keyword> - the exact shortage crippling the world's <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword>.</li></ul>The holidays are coming, and that <a href="https://www.businessinsider.com/more-expensive-goods-supply-shortage-congested-shipping-ports-texas-freeze-2021-3">supply-chain crisis</a> you may have heard about is going to make shopping miserable.Hundreds of thousands of ships full of imported goods from Asia are <a href="https://www.businessinsider.com/shipping-containers-stuck-california-ports-combat-shortages-2021-9">piled up outside of Los Angeles</a> and other major ports. <a href="https://www.businessinsider.com/why-is-there-chip-shortage-car-companies-electronics-supply-chain-2021-2">American automakers don't have enough semiconductor chips</a> to make as many cars as people want to buy. Every other product - from toys to computers - that needs a chip will be in short supply, too.What's often overlooked is that official US government policy is oriented around making these exact chips harder for <keyword id="11892748" type="UNKNOWN" weightage="60" keywordseo="china" source="Orion">China</keyword> to manufacture. US President <keyword id="99719" type="UNKNOWN" weightage="60" keywordseo="joe-biden" source="Orion">Joe Biden</keyword> is continuing a "<a href="https://www.businessinsider.com/trump-trade-war-will-make-these-products-more-expensive-2018-6">trade war</a>" with his Chinese counterpart, Xi Jinping, that began under <keyword id="11914386" type="UNKNOWN" weightage="60" keywordseo="donald-trump" source="Orion">Donald Trump</keyword>, and he's not blinking as the supply-chain crisis endangers Christmas.The ships-and-chips crisis is another way America and China are on the verge of "decoupling,"as the Trump-era trade war hardens into a new status quo. People hoping for an easier holiday shopping season are overlooking how long and painful this transition could be. <h2>The US-China trade war has left the US short on electronics and cars</h2>The US <a href="https://www.semiconductors.org/wp-content/uploads/2020/09/Government-Incentives-and-US-Competitiveness-in-Semiconductor-Manufacturing-Sep-2020.pdf">accounts for just 12%</a> of global chip production, and Asia accounts for a whopping 75%. according to a<a href="https://www.semiconductors.org/wp-content/uploads/2020/09/Government-Incentives-and-US-Competitiveness-in-Semiconductor-Manufacturing-Sep-2020.pdf"> report</a> from the Semiconductor Industry Association, which projects China becoming the largest chip producer by 2030.But Donald Trump ran on a largely anti-globalization platform in 2016, with a particular focus on how America is getting "ripped off" by China. Chips were an area of leverage.China isn't just an exporter of chips, it also needs a steady supply of particularly sophisticated integrated circuits from other countries, including the US, to fuel its consumer electronics manufacturing machine. In the past decade, China has been importing more and more chips from the US, because it needs to insert them into electronic products that get shipped back around the world.China is generations behind in making the most cutting-edge chips. For instance, the world's largest semiconductor firm, Taiwan Semiconductor Manufacturing Corporation (TSMC), is developing ultra-small chips of 3-nanometers and smaller. China's largest chip firm, Semiconductor Manufacturing International Corporation (SMIC), just began making 14-nm chips in late 2019.The US is determined to make China's manufacturing efforts difficult.Last September, the Trump White House <a href="https://www.businessinsider.com/china-chipmaker-smic-us-sanctions-2020-9">imposed export restrictions</a> on SMIC, forcing it to source parts elsewhere and reconfiguring supply chains in the process.Meanwhile, companies <a href="https://www.reuters.com/article/us-autos-tech-chips-focus/trumps-china-tech-war-backfires-on-automakers-as-chips-run-short-idUSKBN29K0GA">buying their chips from SMIC</a> had to go elsewhere, only to find that alternative chipmakers were <a href="https://www.wsj.com/articles/tsmc-to-spend-up-to-record-28-billion-in-advanced-chips-capacity-11610623587">already at full capacity</a>. America struggled to rely on its own production, as lead US semiconductor giant Intel struggled with <a href="https://www.businessinsider.com/intel-delay-chip-production-stock-plunges-2020-7">its own production problems</a>. And some firms have been hoarding chips, <a href="https://www.taiwannews.com.tw/en/news/4306366">claims TSMC's CEO Mark Lui</a>, making the chip crunch even worse. The Biden administration has been <a href="https://www.businessinsider.com/reviews/out?u=https%3A%2F%2Fwww.wsj.com%2Farticles%2Fu-s-enlists-allies-to-counter-chinas-technology-push-11614524400">enlisting its allies</a> to freeze China out from the technological equipment it needs, making sourcing even harder for the country.This all happened after the pandemic shut down semiconductor manufacturing operations for months in 2020, leading to spikes in the prices of new and used cars and shortages of all kinds of electronics.<h2>Biden isn't changing course</h2>Those hoping for the Biden administration to reject Trump's playbook have been sorely disappointed. The president has done little to alter his predecessor's aggressive trade stance since taking office eight months ago. Katherine Tai, the US trade representative, confirmed the tough policy would continue in a Monday speech."For too long, China's lack of adherence to global trading norms has undercut the prosperity of Americans and others around the world," she said in a speech at the Center for Strategic and International Studies, adding it's "increasingly clear" that China hasn't addressed the US's concerns.Biden said earlier this year the key to navigating the current chip shortage crisis is to invest in the country's chip production, allotting $50 billion in his infrastructure plan for domestic chip manufacturing incentives. "The plan I propose will protect our supply chain and revitalize American manufacturing," he said in April, <a href="https://www.nbcnews.com/business/business-news/biden-auto-executives-chip-makers-meet-bid-solve-crippling-shortages-n1263847">during a virtual summit</a> with auto executives and other business leaders. Of course, Biden was talking about "our supply chain" - meaning an American one - and not the globalized "<a href="https://www.businessinsider.com/what039s-next-for-chimerica--2013-7">Chimerica</a>" supply chain of the early 2000s.The Biden administration recently made countering China the centerpiece of its foreign policy agenda, <a href="https://www.businessinsider.com/biden-cia-director-creates-new-unit-focus-key-rival-china-2021-10?utm_source=feedburner&amp;utm_medium=feed&amp;utm_campaign=Feed%3A+businessinsider%2Fthelife+%28The+Life%29+Life%29">even reorganizing the CIA</a> to make China a principal focus. The CIA described the country as a "key rival."The transition to homegrown chip production will be more easily said than done. American manufacturers aren't used to expensive American labor, so they'll need time to wean off foreign contract manufacturers, <a href="https://www.vox.com/recode/22336388/gm-chip-shortage-ford-semiconductors-biden">Recode</a> noted. Meanwhile, it can take years to get new production facilities off the ground.Americans, then, are set to endure a lengthy standoff. A JPMorgan note on Friday by a team led by Jahangir Aziz stated that US-China trade tensions are set to remain a "palpable risk," as China is in the midst of an "economic-policy regime shift" and "intensified US-China tension since 2018 has entered a relative freeze."Speaking on Friday after a disappointing jobs report underscored the difficulties facing the economic recovery, Biden advocated again for his infrastructure plan, which is struggling to make its way through Congress.He stressed the need for America to regain leadership and become more "competitive," and he highlighted one country outcompeting and outspending America on its infrastructure and economy: <a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/10/08/remarks-by-president-biden-on-the-september-jobs-report/">that country was China</a>. That could mean a lot more lean Christmases.

The supply-chain disaster that is eating Christmas is being driven by a Biden-Xi conflict that many are overlooking

<ul class="summary-list"><li>China's <keyword id="11893545" type="UNKNOWN" weightage="60" keywordseo="evergrande" source="Orion">Evergrande</keyword> is spooking <keyword id="11893875" type="UNKNOWN" weightage="60" keywordseo="markets" source="Orion">markets</keyword> and the <keyword id="11921987" type="UNKNOWN" weightage="60" keywordseo="global-economy" source="Orion">global economy</keyword> faces a range of threats that could derail recovery.</li><li>Soaring <keyword id="11994712" type="UNKNOWN" weightage="60" keywordseo="energy-prices" source="Orion">energy prices</keyword> are disrupting production; in the background the US and China still aren't getting along.</li><li>With growth slowing and prices hitting multiyear highs, economists are talking about the dreaded "<keyword id="12084044" type="UNKNOWN" weightage="60" keywordseo="stagflation" source="Orion">stagflation</keyword>."</li></ul>The name Evergrande is becoming as famous in 2021 as the name Lehman Brothers was in 2008. The colossal Chinese real-estate developer is wobbling, threatening markets far outside China's borders. But as big as a $300 billion debt default is, it could just be the tip of the iceberg.The world's <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword> is struggling with higher prices, shipping delays, and widespread shortages. The combination of them could lead to even great struggles ahead.Four major indicators are flashing red alarm signals, and they could well turn into something worse.<h2>(1) Evergrande saga rattles world markets</h2>Ever since the previously little-noticed American mortgage-backed security market imploded in 2008 and took down Lehman Brothers with it, <a href="https://www.businessinsider.com/jim-chanos-evergrande-lehman-brothers-china-hsbc-blackrock-debt-growth-2021-09">endangering the world's financial system</a>, economists have been alert to the "<a href="https://www.businessinsider.com/economic-outlook-9-scenarios-coronavirus-recovery-recession-mckinsey-experts-2020-4">black swan</a>" financial risk, and its cousin, the "<a href="https://www.stranberg.com/post/what-is-a-gray-rhino">gray rhino</a>."Evergrande might be just <a href="https://blogs.cfainstitute.org/investor/2017/10/23/do-gray-rhinos-pose-a-greater-threat-than-black-swans/">such a rhino</a>, the kind of threat you are aware of, but don't consider serious until its horns are bearing down on you. After riding a wave of unbridled borrowing and rapid growth, the company is <a href="https://www.businessinsider.com/china-housing-market-explainer-cost-debt-wealth-evergrande-impact-2021-9">facing a default</a> on more than $300 billion, and a Chinese government determined <a href="https://www.businessinsider.com/evergrande-debt-crisis-china-crackdown-markets-mohamed-el-erian-investing-2021-9">not to let it off the hook</a>.In a matter of weeks, Evergrande has endured a handful of credit downgrades, investor protests, last-minute fundraising pushes, and missed interest payments. The saga immediately roiled global markets. Stocks tumbled on fears that a potential default would slam the <keyword id="12135640" type="UNKNOWN" weightage="60" keywordseo="chinese-economy" source="Orion">Chinese economy</keyword> and, in turn, slow global growth.Evergrande has less than a month to make late payments and dodge default. But as deadlines loom and the company struggles to raise cash, the world economy is waiting with bated breath for a sign of the rhino's stampede being averted.<h2>(2) US-China tensions threaten to grow into a decoupling</h2>The Chinese government's tough stance on Evergrande is emblematic of its tougher stance on its corporate sector, an issue that has roiled stock markets on both sides of the Pacific.China's <a href="https://markets.businessinsider.com/news/stocks/didi-stock-price-china-crackdown-us-ipo-ride-hailing-uber-2021-7">crackdowns</a> have affected major US-listed tech companies such as ride-hailing app Didi, besides <a href="https://www.businessinsider.com/what-is-ant-group-china-jack-ma-digital-payment-2020-7">preventing the biggest IPO in history</a>, of billionaire Jack Ma's Ant Media group. The US response has been to tighten up its own listing rules.The US will soon unveil its trade policy with China, which Trade Representative Katherine Tai <a href="https://www.politico.com/news/2021/09/30/biden-trump-tariffs-china-514866">told Politico</a> will "build on" tariffs worth billions of dollars on Chinese imports."The era of blinders-on pursuit of ever-deeper economic engagement with China is over, and it won't be coming back," Ian Shepherdson, chief economist at Pantheon Macroeconomics, said.The US and China decoupling could be another round of Trump-style tariffs, where prices for Chinese imports would soar as companies pass on the costs to everyday Americans, or it could be a bigger reconstruction of the globalized supply chain. China has also provided US companies with cheap labor for decades. If businesses look elsewhere for their manufacturing needs, higher production costs would raise shelf prices higher still.<h2>(3) Soaring energy prices are destabilizing economies</h2>Decoupling means everything is more expensive, and the changes wrought by the pandemic and shifts in regulatory behavior have made commodity prices way costlier, and less predictable to boot.Global energy prices have soared this year as producers have struggled to keep up with a rapid rebound in demand after major economies lifted COVID-19 restrictions. In Europe, natural gas prices have risen more than 500% over the last year to record highs.Oil prices have <a href="https://markets.businessinsider.com/news/commodities/oil-prices-brent-wti-crude-natural-gas-shortage-energy-crunch-2021-9">climbed sharply</a> as users pivot away from natural gas and coal, with Brent crude up around 90% over the last year.The jump in energy prices has been a key factor driving <keyword id="11894140" type="UNKNOWN" weightage="60" keywordseo="inflation" source="Orion">inflation</keyword> to multi-year highs in advanced economies and making central banks reconsider their stimulus packages. The <a href="https://www.businessinsider.com/fed-tapering-might-come-soon-fomc-september-meeting-asset-purchases-2021-9?utm_source=markets&amp;utm_medium=ingestgest">Federal Reserve</a> and <a href="https://www.businessinsider.com/bank-of-england-interest-rate-bond-buying-inflation-gas-prices-2021-9?utm_source=markets&amp;utm_medium=ingestgest">Bank of England</a> have now said they could well tighten monetary policy sooner rather than later, spooking markets.Energy shortages have also disrupted production in China, weighing on growth in the world's second-biggest economy and threatening the <keyword id="11921986" type="UNKNOWN" weightage="60" keywordseo="supply-chains" source="Orion">supply chains</keyword> of huge companies <a href="https://www.businessinsider.com/china-power-shortage-halts-apple-tesla-suppliers-stresses-supply-chain-2021-9">such as Apple</a>.<h2>(4) The specter of stagflation</h2>Experts fear supply bottlenecks will fuel a dangerous cocktail of weak economic growth, high unemployment, and stifling price growth. That brings up the biggest risk of all to the world's economy: the dreaded "<a href="https://markets.businessinsider.com/news/stocks/dr-doom-nouriel-roubini-economist-stimulus-debt-supply-chain-stagflation-2021-7">stagflation</a>" last seen in the 1970s, when stagnant growth and inflation combined to wreak misery on millions' livelihoods.Policymakers looking to curb inflation risk driving unemployment even higher, while attempts to boost hiring with low rates could spark even stronger inflation. The situation is already confounding experts. Rising prices are "a function of supply-side bottlenecks over which we have no control," Federal Reserve Chair Jerome Powell told the House Financial Services Committee on Thursday."As it continues, bottlenecks, hiring difficulties, and other constraints could, again, prove to be greater and more enduring than anticipated, posing upside risks to inflation," he said in a separate Senate hearing on Tuesday. Evergrande, then, is simply the most visible risk facing the global economy. The iceberg standing in the way of recovery is larger than it first appears. The energy crunch, the transPacific decoupling, and the ghost of stagflation are monsters lurking just under the waves.

Evergrande may just be the tip of the iceberg. It's one of 4 major warning signs flashing for the global economy.

<ul class="summary-list"><li>America is facing a <keyword id="35061" type="ORGANIZATION" weightage="60" keywordseo="housing">housing</keyword> - and <keyword id="1592301" type="PERSON" weightage="60" keywordseo="lumber">lumber</keyword> - crisis that's not going away.</li><li>The lumber industry can't keep up with demand, with prices up over 85% year-to-date and 280% in the past 12 months from May 2021.</li><li>It's limiting a shrinking housing inventory and contributing to lack of affordability for first-time buyers.</li></ul>The <keyword id="34412" type="ORGANIZATION" weightage="100" keywordseo="economy">economy</keyword> is reopening at such speed that it's caused <a href="https://www.businessinsider.com/everything-that-could-get-more-expensive-in-2021-inflation-2021-3">all kinds of shortages</a>, from chicken wings to computer chips. But nobody saw lumber coming.America is in a lumber frenzy, and it's not abating anytime soon. Even though prices fell for six straight days in mid-May, <a href="https://markets.businessinsider.com/news/stocks/lumber-prices-decline-6th-straight-day-even-supply-bottlenecks-persist-2021-5-1030437776">Markets Insider's Will Daniel</a> reported they were still up more than 85% year-to-date and 280% in the last 12 months.The lumber industry is struggling to ramp up supply as exploding demand is clashing with limited production, resulting in high price tags and an overall shortage. The thing is, you need lumber to build new houses, and Americans really want new houses right now. The number of homes for sale has never been this low, and new builds are a way to supply houses for everyone who wants them - and a lot of people do."We entered the sort of unique period of 2020 underbuilt by at least a million single-family homes," Robert Dietz, chief economist at the National Association of Home Builders, told Insider. That was a disaster for home-shoppers during the pandemic, as low mortgage rates drove a <a href="https://www.businessinsider.com/how-2020-broke-the-housing-market-inventory-could-run-out-2020-9">housing boom</a>, resulting in record-high prices, bidding wars - and a historic shortage of homes. As builders moved to increase supply, expensive lumber added to the price. The National Association of Realtors <a href="https://www.businessinsider.com/real-estate-homebuying-soaring-lumber-prices-new-homes-construction-2021-3">reported in February</a> that rising lumber costs added $24,000 to the cost of new homes since the start of the pandemic. As of April, that number had increased to nearly <a href="https://www.cnn.com/2021/05/05/business/lumber-prices-home-building-costs/index.html">$36,000</a>. Home prices have <a href="https://www.businessinsider.com/why-there-are-so-few-homes-for-sale-high-prices-2021-3">been on the incline</a> for years, but they reached a boiling point during the pandemic. In April, the median home sales price rose to an all-time high of $375,000, according to <a href="https://www.realtor.com/news/trends/housing-market-crash/#:~:text=Nationally%2C%20median%20home%20list%20prices,to%20Realtor.com%C2%AE%20data.">Realtor.com</a>."When we're talking about the price and availability of lumber, we're talking about <keyword id="3701323" type="PERSON" weightage="60" keywordseo="Housing-affordability">housing affordability</keyword> conditions," Dietz said. "Those higher costs ultimately will dictate the amount of supply that's available."The implications are disastrous for more than just houses. In an interview with <a href="https://www.businessinsider.com/why-lumber-prices-futures-surge-is-ominous-veteran-pm-explains-2021-5">Insider</a>, award-winning portfolio manager Michael Gayed warned that a lumber crash could lead to a stock market crash. "If I look at the lumber futures continuous contract going back to 1980 versus what's happened in the past six to seven weeks, this looks stupid," he said of the run-up in lumber prices. "This is absurd. There's nothing that justifies this."<h2>The <keyword id="11273846" type="UNKNOWN" weightage="60" keywordseo="lumber-crisis">lumber crisis</keyword> is intensifying an already heated market for first-time buyers</h2>Lumber's record high prices date back to the onset of the pandemic and come from the combination of a supply chain under a huge amount of stress and a massive jump in demand.In March and April 2020, sawmills shut down due to pandemic-related safety restrictions, and lumber has taken off ever since they reopened."The price gains are being led by the huge demand from home builders and do-it-yourselves with the strength in the housing market," Peter Boockvar, chief investment officer at Bleakley Advisory Group, told Insider, adding that demand would have taken off even without sawmills being shuttered last year, which only made the supply situation worse.<div type="image" title="Lumber" height="733" width="977" msid="82720150" hostid="261"></div>In addition to accelerated demand, the supply of lumber has also been strained by insufficient domestic production due in part to the 2020 wildfires, while internationally, <a href="https://fortune.com/2021/05/12/lumber-prices-cost-shortage-covid-housing-market-construction-costs-mortgage-rates/">limited access and hefty tarrifs on Canadian softwood</a> have also added to the shortage. Another thing exhausting supply: wooden pallets. Consumers have leaned toward buying more durable goods such as large appliances and furniture during the pandemic, and those are shipped on wooden pallets, which are obviously made of lumber, Joe Sanderson, managing director of natural resources at Domain Timber Advisors, told CNBC.The reality is that contractors have been underbuilding since the Great Recession. Gay Cororaton, the director of housing and commercial research for NAR, told Insider. There could be more homes on the market absent a historic lumber shortage, she said.Affordability challenges will continue to push homeownership out of reach for many first-time buyers - many of whom happen to be millennials. That generation has just reached peak age for first-time homeownership, another driver in 2020's housing boom, which quickly turned into millennials' <a href="https://www.businessinsider.com/housing-market-forecast-millennials-buying-homes-crisis-2021-4">second housing crisis in 12 years</a>. While some millennials are finally taking steps toward homeownership, others are further from doing it than ever. <a href="https://www.pewresearch.org/fact-tank/2020/09/04/a-majority-of-young-adults-in-the-u-s-live-with-their-parents-for-the-first-time-since-the-great-depression/">According to a Pew Research Center report</a>, 52% of young adults lived with at least one of their parents as of July 2020, topping the last high of 48% many decades ago, in 1940.<div type="image" title="Home construction" height="2184" width="2912" msid="82720154" hostid="261"></div>"That collapsed household formation has occurred because of housing affordability burdens," Dietz said. "When we're talking about lumber, we are talking about the cost of people obtaining safe, decent, and affordable housing."To be sure, the price of lumber has been decreasing since May 7. Lumber trader Stinson Dean <a href="https://www.bloomberg.com/news/articles/2021-05-14/why-lumber-trader-stinson-dean-says-the-great-short-squeeze-is-over?sref=BLKWHazc">told Bloomberg</a> he thinks the "lumber squeeze" is over due to a behavioral shift in among buyers and an increase in inventory among big bix retailers. But prices are sill much higher than they were before the pandemic. On May 14, the National Association of Home Builders posted on Twitter two quotes for lumber packages from an Alabama supplier. The quotes are three months apart and show a difference of over $30,000.<h2>Lumber remains expensive and scarce</h2>Without a solution to the lumber crisis, affordability will remain out of reach for many prospective homebuyers as supply remains scarce. "Housing is anywhere between 15% to 18% of GDP, and in that supply-chain discussion, we need to be thinking about lumber as well because about 90% of newly built single-family homes are wood framed," Dietz said. "From a policy point of view, policymakers really need to be taking seriously the idea of improving and expanding the supply chains."In March, The National Association of Homebuilders <a href="https://www.nahb.org/-/media/NAHB/advocacy/docs/top-priorities/lumber/housing-coalition-letter-to-sec-raimondo-lumber-prices-031121.pdf">wrote a letter </a>to the Department of Commerce asking for the Biden administration to attend to the rising price and shortage of lumber."The potential for housing and construction to grow and lead the economy is limited as long as lumber remains expensive and scarce, and the ramifications for job growth are significant. Building 1,000 average single-family homes creates 2,900 full-time jobs and generates $110.96 million in taxes and fees for all levels of government to support police, firefighters and schools," the letter reads.Indeed, US Trade Representative Katherine Tai <a href="https://nahbnow.com/2021/05/lawmakers-urge-action-on-lumber-u-s-trade-rep-to-push-for-solutions-to-the-lumber-pricing-issues/?utm_source=twitter&amp;utm_medium=Social&amp;utm_campaign=Social2021cial2021">addressed rising lumber prices</a> during a Senate Finance Committee hearing on Biden's 2021 trade policy agenda earlier this month, and said she's pushing for a solution. "This is not just something we've been talking about within the administration but something that I've raised directly with my Canadian counterpart and I've certainly heard a lot from members of Congress about this as well," she said. "I want to assure that I will be raising this again with my Canadian counterpart at the free trade commission meeting of the USMCA and I will continue to push for solutions to the lumber pricing issues that we are experiencing."

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The price of lumber is wild right now and it's a disaster for the already disastrous housing market

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