Reporting from many news outlets, from The Washington Post and CNBC to industry sources like The Construction Specifier and Concrete Construction, highlights the increases to remodeling and home building costs that are starting to be felt as a result of the United States’ increasing tariffs on steel, aluminum, quartz, and lumber from various countries around the globe.
The National Association of Home Builders has weighed in on the tariffs, calling them a $1 Billion Tax Hike on Housing:
NAHB Chairman Randy Noel issued the following statement noting the effects this will have on the housing market and urging the White House to change course:
“President Trump’s decision to impose 10% tariffs on $200 billion worth of Chinese imports, including $10 billion of goods used by the residential construction sector, could have major ramifications for the housing industry. With housing costs on the rise, this action translates into a tax increase on housing that will rise even more significantly on Jan. 1 when the tariff rate jumps to 25 percent.
“Further, this tax increase is coming on top of the current 20% tariffs on softwood lumber imports from Canada. The lumber tariffs have already added thousands of dollars to the price of a typical single-family home. – NAHBNow
Professional remodelers and builders in diverse markets have their own concerns relating to the tariffs and how they will affect materials costs and, ultimately, costs for their clients:
For home builds and remodeling projects, these tariffs are even forcing contractors to add in escalation clauses for projects that are being scheduled for next year, because they don’t know how high prices are going to rise. Home values have risen in recent years, which has given homeowners the cash to improve their investment by renovating their home through a general contractor.
This estimate spike in prices and potential for more to come has caused homeowners to want their projects done faster, before any escalation clauses can increase their budget. The tariffs are therefore putting pressure on the industry to work quickly and find other means of cutting building costs to remain within budget.
Adding to the tariffs on Canadian lumber, imported steel and aluminum, this new round of tariffs on Chinese goods will include wall material, floorboards, light fixtures, cabinets and countertops, heating and cooling equipment, tile for bathrooms and backsplashes, and more. Most mosaic, glass and patterned tile are not made in the U.S., as well as the cost of ceramic, natural stone, glass materials, and more. Industry experts estimate that import duties on these items will go up at least 15 to 20 percent, which will in turn force costs on them all to follow suit. – Remodel Works
The tariffs, especially when coupled with the normal year-to-year increase in construction/remodeling costs, may well result in eye-popping changes to the pricing landscape:
Random Lengths, a weekly publication that tracks the North American forest products market, recently reported a 46% increase in the framing lumber composite price from last year. New tariffs may add another 20%. Lumber is a significant component for most projects, and these cost increases will definitely be felt by the end consumer.
Typically, the price of building a home or doing a remodeling project increases at a rate of about 3% each year. The tariffs noted above could easily increase prices for completed projects by 10% or more, and those increases will come steadily over the next 6 months. That means a project that is quoted today for $250,000 could easily cost over $275,000 in the very near future. As the “trade war” continues to imbue uncertainty into our markets, we can expect that other building costs may be affected before it is over. Homeowners considering a remodeling or building project should pay close attention to the significant costs of waiting as opposed to locking in a project and price today. – AIRoom
Here at Strut Design+Build, we are keeping an eye on these price changes and are formulating ways to make sure our clients’ remodeling and custom home building projects remain as affordable as possible.
