The economic ripples from the steel tariffs enacted by President Trump last March are on their way to residential housing market according to a new analysis by the home improvement company, Porch. The company found that tariffs on goods imported from China have the potential to add $17,000 to the overall cost of a newly constructed home adn an increase of 10 to 15 percent on remodel costs.
"Many of the key components in home building and remodeling are facing a higher tariff rate than in previous years, and the impact of those tariffs roll downhill to the end consumer who purchases or owns the home," says Kyle Sandburg, Porch's vice president of research and strategy, in a press release about the analysis. "Consumers should also expect a significant increase in the price of their construction and remodeling projects for 2019. From Canadian wood to steel, stone products – like granite, quartz, tiles – down to iron nails, the large swatch of products these tariffs encapsulate are the foundation to home construction and remodeling."
If there isn't a trade agreement recahed between the U.S. and China next month, homeowners can expect an additional $5,000 (in addition to the $17,000) to the cost of new construction, which could deter many buyers from building at all. Not to mention rising interest rates, Sandburg explains.
"Historically, as home buying becomes less affordable as prices and mortgage rates increase, people turn to remodeling to improve their current living space. Adding 10 to 15 percent to project costs could end up making remodeling out of reach for many people as well. Those considering a home improvement project in the upcoming year should consider locking in estimates with their home professional now."
Read more abotu Porch's steel tariff analysis on home buying at Porch.com.