Trump tariffs could add more than $9,000 to cost of a new home, builders say
President Trump’s tariff policies are causing concerns among builders in the U.S., as they anticipate higher costs for constructing or renovating homes. According to the National Association of Home Builders (NAHB), the increased prices of construction materials such as lumber, aluminum, and steel could add up to $9,200 to the cost of a typical home.
Buddy Hughes, a North Carolina-based homebuilder and chairman of NAHB, highlighted the challenges faced by builders due to elevated building material costs, exacerbated by tariff issues and other supply-side constraints like labor and lot shortages. The uncertainty surrounding the implementation and duration of U.S. tariffs on imports from Canada, Mexico, and China is contributing to market volatility, making both housing developers and homebuyers hesitant to take on financial risks.
Greg Kraut, CEO of KPG Funds, emphasized how tariffs are creating indecision in the housing market and eroding confidence among developers and buyers. This uncertainty, coupled with already high material costs, is leading to a slowdown in construction activity and decision-making.
Realtor Kirsten Jordan noted a shift in buyer preferences towards fully built, move-in ready homes to lock in housing costs before they escalate further. On the other hand, sellers of fixer-uppers are facing challenges as the additional costs for renovations due to tariffs make these properties less attractive to price-conscious buyers.
Dana Schnipper, a partner at JC Ryan building materials supplier, shared a concrete example of how tariffs are impacting construction costs. By importing materials from Canada, the company was able to save costs initially, but the impending tariffs will significantly raise the final expenses for a project in Nassau County. Similarly, Bar Zakheim, owner of Better Place Design & Build, highlighted the impact of tariffs on lumber prices, leading to a 15% increase in his business expenses compared to the previous year.
Despite the challenges posed by tariffs, the NAHB is exploring strategies to boost domestic lumber production to reduce reliance on imports from Canada and Mexico. With over 70% of imported softwood lumber coming from Canada and an equal share of gypsum used for drywall coming from Mexico, the organization is working towards mitigating the effects of tariffs on the construction industry.
In conclusion, the uncertainty surrounding tariffs and trade tensions initiated by President Trump’s policies are reshaping market dynamics and impacting the housing industry. Builders are navigating through higher costs and market volatility, while stakeholders are advocating for solutions to minimize the financial burdens on construction projects. The ongoing efforts to increase domestic production and address the challenges posed by tariffs reflect the industry’s resilience in adapting to evolving economic conditions.
