Home remodeling projects could become much costlier following U.S. President Donald Trump’s decision to slap more tariffs on Chinese imports.
The problem is that the extra costs are likely to be passed onto clients, CNBC reported.
Products including counter tops, laminates and lighting are often manufactured in China, and about 450 in total, worth around $10 billion a year in U.S. expenditures, have been hit with increased tariffs. Trump’s decision increases the tariffs on these home remodeling products to 25%, up from 10% before. What that means is that the additional costs of these products will rise from $1 billion to $2.5 billion, the National Association of Home Builders says.
The price hikes probably won’t hit American consumers until the start of June, but those in the remodeling business say they’re already being impacted.
For example, Bruce Case, chief executive officer of Case Architects and Remodelers in Washington, DC, told CNBC that he’s already seen some clients reduce the size of their projects.
“At the end of the day, I can guarantee you the price of every project we do is going to go up,” Case said.
He added there’s no way for his business to absorb those costs and still survive.
“So it’s probably about a 7-8% increase to the consumer, and I would love to be able to eat some of that, but at this point I don’t know a way to engineer around that, to use different products that aren’t affected or anything like that,” Case continued.
The NAHB also sees home remodeling projects being put off, or delayed, due to the increased tariffs on Chinese products.
“NAHB’s forecast calls for slowing growth, given declining home price appreciation and existing home sales volume, combined with rising construction costs,” said NAHB’s chief economist Robert Dietz.
Those in the remodeling industry are also struggling with increased labor costs, which are said to be getting worse. Almost 75% of remodelers reported in an NAHB survey that they’ve had to increase their prices in the last year due to higher costs of labor.
The growing expense of remodeling means that some consumers are putting off their renovation plans, or at least scaling them down. According to Case, the size of the average remodeling project his company was hired for decreased dramatically last year as consumers tried to balance their budgets.
“That’s my concern for this industry, we’re going to price ourselves out of the market,” he said.
ERA Real Estate, a global franchising leader within the AnywhereSM portfolio of brands, announced today…
Better Homes and Gardens Real Estate LLC announced today the affiliation of Better Homes and…
As of 2022, only 25% of businesses are using marketing automation. This means that there are still…
If you’re new to the world of real estate, the term “CMA” might be a…
Digital marketing is all about using content to drive traffic to your website. It's a…