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Tariffs on Steel, Aluminum, and Lumber Blamed for Spiking Home Construction Prices

In Utah, Texas, and elsewhere, construction costs for new homes are up by about 60 percent this year.

Robijn Page/Westend61 GmbH/NewscomRobijn Page/Westend61 GmbH/NewscomDonald Trump's tariffs on imported steel, aluminum, and lumber are hiking home construction costs by as much as 60 percent in some parts of the country, and the White House's next move on trade might only make things worse.

In Utah, home construction costs have jumped 60 percent since the end of last year, Michael Parker tells The Salt Lake Tribune. Parker is a vice president and senior economist for Ivory Homes, the largest homebuilder in Utah; he says average home prices have gone up by as much as $9,000 to compensate for the higher construction costs. On a percentage basis, no state has grown faster than Utah during the past decade, but trade barriers now threaten to combine with surging demand to drive home prices in Utah higher.

Other fast-growing parts of the country are feeling the same squeeze. In the Dallas suburbs, homebuilders are also reporting 60 percent increases in construction costs due to higher tariffs.

"Even if you are walking into a hardware store looking for a 2x4 for a weekend remodeling project, you're paying a lot more, and it's all a result of these tariffs," Phil Crone, executive officer of the Dallas Builders Association, tells a Dallas–Fort Worth NBC affiliate. Average home prices are up nearly $10,000 since last year in the North Texas market.

By the end of the week, the White House may announce another round of tariffs aimed at Chinese-made goods including home furnishings and appliances. While those tariffs won't directly effect the cost of building new homes, they will likely increase prices for would-be homeowners and those looking to upgrade existing homes.

It's hard to find the potential upside to the White House's tariff policy. Homebuyers stuck paying higher prices are not helping boost domestic industries that Trump is supposedly trying to protect. If prices rise enough to slow demand for new homes, some potential buyers will be shut-out of the market, and construction jobs—always among the first to be affected by a shifting economy, both for good and ill—will likely be lost. A slowdown in the housing market can easily have spillover effects into other parts of the economy too.

Homebuilders remain generally optimistic about their industry, but doubts are creeping in. A monthly index of industry confidence, published by the National Association of Homebuilders, fell to its lowest point all year in August—seven points down from a recent high in December 2017. The sharpest drop, and lowest score, amoung several metrics included in the index was for "buyer traffic," a measurement of consumer interest in new homes. That metric slipped into negative territory in the August survey. Sales of newly built homes have fallen 5 percent in recent months, the trade association reported.

Photo Credit: Robijn Page/Westend61 GmbH/Newscom

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  • Hamster of Doom||

    >>>The sharpest drop, and lowest score, amoung several metrics included in the index was for "buyer traffic," a measurement of consumer interest in new homes. That metric slipped into negative territory in the August survey.

    If it gets bad enough, we may have to ignore this data point entirely.

  • loveconstitution1789||

    And people are still buying homes?

    Yes. Yes they are.

  • SQRLSY One||

    As long as at least 10% of the peons are still breathing, Der TrumfenFuhrer will be judged a GREAT success, in the eyes of His admirers!

  • Scarecrow Repair & Chippering||

    Are some imports still coming in? Yes, Yes they are. No harm, no foul. Some harm, still no foul. Lotsa harm, still no foul.

    When does the actual harm count for anything in your world?

  • Leo Kovalensky II||

    Only when he is harmed.

  • loveconstitution1789||

    I would never buy a home when the market is high or home prices are inflated.

    Its stupid.

  • loveconstitution1789||

    Tariff costs are tiny compared to costs already jacking up the prices of homes.

    Freedom isnt free.

  • Scarecrow Repair & Chippering||

    Especially when busybody know-it-all nannies like you and Trump decide what the rest of us can buy.

  • MichaelL||

    Sounds like a deflection, to me! If we can't afford to buy those homes, is it because the builders can't take a small hit on their profits using "American" goods. Otherwise...Remind me. Is Canada part of the Americas?...(;-P... We should not be paying for the cheap lumber the Canadians are dumping on our market, placing tariffs on our lumber going there!

  • Peter Duncan||

    Thank you for saying this^

  • loveconstitution1789||

    It was fine when all the other nannies and regulators drove up housing costs by 20-30-40-50% over the last 40 years.

    Trump is the monster...today.

  • Leo Kovalensky II||

    And you still have Healthcare?

    I guess Obamacare brought no harm.

  • loveconstitution1789||

    I pay cash for healthcare. I get the cash discount.

    I dont have health insurance except for catastrophic care.

  • Juice||

    I dont have health insurance except for catastrophic care.

    The old cheap catastrophic care policies were made illegal. Now you have policies that cost 2-3X as much, have a higher deductible, but "cover" way more stuff that you'll never ever make a claim for.

    So that "catastrophic" policy you have is no such thing and it costs at least 2X what it would without Obamacare.

  • loveconstitution1789||

    ObamaCare didnt make those plan illegal, per se. They lowered the age to 30 and younger.

    If you already had a plan, you were grandfathered in.

    Obama didnt want the new customers jumping on those catastrophic health plans.

  • Juice||

    If you already had a plan, you were grandfathered in.

    That's what they said, but that was a lie. My plan was made illegal and it was not grandfathered in. Insurance companies had to totally restructure their plans to do the community rating thing anyway. There was no way they could viably offer the old policies even if they wanted to. If I wanted the same coverage I would have had to pay almost 3X as much in premium. I just said no thanks.

    Hey, maybe you got lucky and you actually got to keep your old policy somehow (doubtful), but that doesn't mean Obamacare wasn't harmful.

  • loveconstitution1789||

    Did you do the 'hardship exemption' for catastrophic plans? That was one workaround for that.

  • loveconstitution1789||

    Obamacare was/is horrible but I have good attorneys so we sidestep bullshit regulations all the time.

    I dont pay into social security and medicare and wont receive it, as an example of my savvy.

  • BYODB||

    Do you still have healthcare, or do you still only have health insurance. Because those are two different things, and notably no one in national politics is talking about health care they're talking about insurance.

    I get what you were shooting for though, it's just not a good example.

  • Juice||

    Nah. Your "insurance" policy covers routine care and just about anything else, so it's not really insurance. It's "care." Whether you can actually use it to be treated is an entirely different question.

  • SQRLSY One||

    Well, HOW do you expect me to prosper, or even survive for that matter, if I do NOT have insurance coverage mandates for aromatherapy, Scientology therapy, addiction therapy, space alien abduction therapy, sex change therapy, species change therapy, enrich-my-uncle-the- hypnotist therapy, past-lives regression therapy, sex addiction therapy, love-your-Government -Almighty relationship therapy, therapy-therapy, and on and on...

    HOW, I say, HOW do you expect me to survive w/o all of this?!?!?

  • loveconstitution1789||

    I pay cash for routine stuff and have catastrophic health insurance for major stuff.

    Pay by the year for lower rates.

  • Juice||

    have catastrophic health insurance for major stuff.

    Luck you, if true. I don't think you're under 30 and if your old plan was actually grandfathered in, congratulations, you're a very rare bird indeed.

    And I just looked it up. You're minimum deductible is $7150. Hell, what I called "catastrophic" coverage had a deductible of $2700 (before Obamacare, that was considered kind of high) and a premium of about $80/mo.

  • loveconstitution1789||

    Im not under 30. I pay $65 per month with yearly payment discount for catastophic insurance.

    My plan does not kick in unless its major stuff like a heart attack. My deductible is $10,000 IIRC but they pay 90% + after that. Its worth it for a major medical catastrophy and a medical bill of $200k +

    If youre over 25 and dont have $5000 or more in cash reserves, youre doing something wrong.

    You should be able to pay all routine doctors visits for $200-500 in cash. Same thing with dentists.

  • BYODB||

    Correct, regardless of your semantic argument insurance is not a guarantee of care. It's a tepid promise to pay for the care if you can find it and meet the hundreds of unknown qualifications that authorize the payment.

  • BYODB||

    Whoops, sorry. You're still wrong. I missed that you tried to redefine insurance as 'care' when that was explicitly the part that is factually wrong.

  • MichaelL||

    Went to the ER for a kidney stone. According to the EOB, they charged me $11,000. It says the hospital was paid nothing. They sent me a bill for ~$950. I have Medicare and a low dollar supplement. Since they let me lie in misery, the ER waiting area floor, for six hours, I told billing they would get paid in the same manner as their care was doled out to me...VERY SLOWLY!

  • loveconstitution1789||

    You paid put of your taxayers dollars. So did all of us taxpayers.

    I pay in cash, so I would have been rushed in. They let you languish for triage and payment reasons. Also would depend on what hospital ypu went to.

  • loveconstitution1789||

    Tariffs on Steel, Aluminum, and Lumber Blamed for Spiking Home Construction Prices

    Small compared to the massive costs of regulation on material and building, taxes, and inflation.

  • Scarecrow Repair & Chippering||

    So you'll accept small harm. How much harm does it take before you admit there is any harm worth worrying about?

  • loveconstitution1789||

    Freedom is never free.

    I give Trump 12 months (June 2019) to pressure trading partners to lower their trade restrictions.

  • Peter Duncan||

    "Freedom is &£~π f#@$¥"

    Sorry, we couldn't understand what you were saying with Trump's dick in your mouth.

    You'd better spit it out.

  • loveconstitution1789||

    Hillary's dick in your mouth does cause one to comment in gobberish. Please resubmit your nonsense for evaluation.

  • Peter Duncan||

    Just quoting you, Trump humpers!

  • BYODB||


    Donald Trump's tariffs on imported steel, aluminum, and lumber are hiking home construction costs by as much as 60 percent in some parts of the country, and the White House's next move on trade might only make things worse.


    So, it has nothing to do with housing policy after all. One more thing we can blame on Trump that's been an increasing problem for decades. Well played, time travelling Trump!

  • loveconstitution1789||

    Exactly. According to Reason, housing construction costs were not going up until Jan 20, 2017.

  • BYODB||

    Don't get me wrong, either. Tariff's on materials drive costs too. Claiming otherwise would be stupid. But to claim this increase, in these two particular locations (one of which I happen to live in), is disingenuous since both are experiencing a boom. If it was the tariff's, the entire nation would see building costs jump 60% (or more!).

    It's a nice little lie that Reason can tell to appeal to the never trumpers and Democrats, I guess. No more, and no less. So much for 'Reason', I guess.

  • loveconstitution1789||

    I know you are one of the people here that sees right thru the Reason bullshit.

  • BYODB||

    And, as a simple exercise in logic you use two examples of extremely high demand in housing as your example yet provide no context on how much of that '60% increase' scare number is tariff related, and how much is supply/demand related.

    Are the tariffs on materials 60% higher? Reading this article, one can only assume that must be it right?

  • Sidd Finch v2.01||

    The quotes are from lobbyists. There's no reason to take any of this shit at face value.

  • MattXIV||

    Making it explicit, 25% on steel, 10% on aluminum, 20% on soft wood from Canada and 70/30 materials to labor is pretty typical for construction costs. Even maximizing impact by assuming inelastic demand + no substituion of domestic products +100% of the materials are at the highest rate that's still going to be a 17.5% max increase in comstruction costs, less than 1/3 of 60%. I'd say I expect better from reason, but after the last few years, I don't.

  • Juice||

    In Utah, Texas, and elsewhere, construction costs for new homes are up by about 60 percent this year.

    Why are the cost increases localized in these areas? Surely it's not due solely to tariffs. I'm thinking it may have more to do with labor costs, but I'm just guessing here.

  • Sidd Finch v2.01||

    In Utah, home construction costs have jumped 60 percent since the end of last year, Michael Parker tells The Salt Lake Tribune. Parker is a vice president and senior economist for Ivory Homes, the largest homebuilder in Utah; he says average home prices have gone up by as much as $9,000 to compensate for the higher construction costs.

    LOL journalism

  • TerdFergeson||

    Yeah, sign me up for these $25,000 houses.

  • Sevo||

    "In Utah, Texas, and elsewhere, construction costs for new homes are up by about 60 percent this year."

    And while tariffs are never good, they in no way amount to anything like this amount.
    Reason can and has pointed out the harm from tariffs, but this ain't one of them.

  • TigerMom87||

    Incentive for us to produce these raw materials locally!!

  • TigerMom87||

    Also, if demand for materials has increased because of the increase in consumer confidence, prices will go up!!!!

  • Kivlor||

    Oh no! House prices are going up! Those pesky tariffs...

    So, how about the increase in housing prices from importing 1,000,000 immigrants each year? Oh, that's good because sacred brown people.

  • swampwiz||

    A $10K rise in home construction cost that equates to a 60% rise must mean that the cost of constructing a home was $13.3K and now is $23.3K

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