AND The US apartment market has already fought under the weight of high interest rates of mortgage, and Low supply of existing homes for sale and historically high house prices.
Now the tariffs on construction materials add even greater pressure.
About 30% of soft wood consumed in the US is imported, mainly from Canada. The wall plate, known as gypsum, is imported from Mexico. The 25% of Donald Trump’s chairman has charged goods of two key trade partners, they will make the products much more expensive. AND Mexican tariffs are delayed It’s a month on Monday, but they’re still on the table in the future.
“More than 70% of imports two essential materials that home builders rely on – softwood wood and plaster – come from Canada and Mexico,” wrote Carl Harris, president of the National Association of House Builders in a statement. “Wood tariffs and other building materials increase construction costs and discourage new development, and consumers eventually pay tariffs in the form of higher home prices.”
House prices have already grown According to November, more than 40% from the beginning of the pandemic and it was 3.8% higher, compared to the previous November, according to the latest reading from S&P Coreologic Case-Shiller National Index Home Prices. This annual increase was greater than 3.6% in October.
Duties on building materials could make it difficult for customers to make the market.
“We believe this could be even worse the accessibility crisis for customers who can first. On the other hand, this could increase pressure on Congress to bring policies that stimulate a higher structure at the starting level, including extended tax loan programs,” she wrote is Jaret Seiberg, a residential policy analyst for TD Cowen Washington Research Group.
Future customers of homes leave property for sale during an open house in Clarksburg, Maryland.
Roberto Schmidt | AFP | Getty Images
NAHB asks Trump’s administration to exclude construction materials of 25% of tariffs, noticing its executive order on the first day of its presidency that sought to “expand the supply of housing”.
While the US has increased the production of wood in recent years, 70% of the imports of sawmill and wood products come from Canada – $ 8.5 billion. They are already subject to a 14.5%tariff, so Trump’s new policy would increase it to over 39%.
And 71% of the import of lime and plaster of Mexico is in the total amount of $ 352 million. Other materials such as steel and device are obtained from China. Trump Put an additional 10% tariff to the goods from China on Saturday.
New duties of imports from China, Canada and Mexico could increase the costs of building materials by $ 3 billion to $ 4 billion if everyone enters into force, which affects the builder’s ability to complete the projects, NAHB states.
Tariffs are likely to hit smaller builders of a house with firmer margins, but big builders are not immune.
“Even with the smaller part of our wood that comes from Canada, and some materials from Mexico, we will all be affected-in turn in turn can affect consumers and their ability to buy a house in the short term,” said Sheryl Palmer, Executive Director of the House with headquarters in Arizona Taylor Morrison. “At a time when some consumers are still struggling to overcome larger interest rates, my sincere hope is that it will be short -lived.”
Builders are already struggling with a lack of work that worse only after Trump’s administration has started mass deportations of unfathomable immigrants. About 30% of construction workers are estimated as immigrants, and the significant proportion of these workers is unfathomable, According to the National Immigration ForumA group of immigration advocacy.
“You can all drive them out of the country, but who will build houses?” Said Bruce McNeilage, CEO of Kinloch Partners based in Nashville, a programmer for renting a family home.
Although most of the tariff effects are on a new structure of apartments, the existing market could also feel effects. If the cost of other wide consumption goods increases, all potential customers will have less spare money to save for the advance.
It was also expected that interest rates would fall this year, but if the inflation is re -heated due to tariffs, the rates could increase. This layer of economic reality and emotional perception of personal wealth could guess all the important, upcoming spring market.
