Anthony Cabrera recently completed constructing his three-bedroom home in Hopatcong, New Jersey, where he purchased key items such as couches ahead of anticipated tariffs. Cabrera began his project in March and faced rising costs associated with various building materials, which escalated his initial budget from approximately $300,000 to $450,000. He sought to finish his house before new tariffs on imported kitchen cabinets, timber, and wooden furniture were enacted.
The recent tariffs were introduced by the U.S. administration and are intended to boost domestic manufacturing. However, professionals in the housing market have expressed concerns that these tariffs may exacerbate existing challenges, particularly regarding construction costs. Economists have suggested that the U.S. housing market is already vulnerable and any increase in input costs could further hinder new construction efforts.
Tariffs imposed earlier this year included significant levies on steel and copper, which have also contributed to elevated building costs. Calculations from economists indicate that U.S. consumers might bear a substantial portion of these tariff costs moving forward, potentially influencing pricing across various sectors.
Furniture companies have forewarned about impending price increases due to tariffs. For example, the furniture retailer RH stated that it would encounter $30 million in new tariff-related costs in the second half of the year, which has led to concerns about pricing strategies. Similarly, IKEA, known for budget-friendly options, has indicated that rising material costs may compel it to raise prices.
Jean Lin, founder of a furniture design gallery in Manhattan, noted that even though her offerings primarily consist of U.S.-made items, her sales have suffered due to uncertainties about tariffs leading to reduced consumer spending. Experts warn that the ongoing tariff situation may particularly impact the construction of affordable housing, as escalating material costs could deter developers from pursuing low-margin projects.
The housing market’s difficulties have been compounded by high mortgage rates, making affordability a growing concern. While experts believe that the recent tariffs alone may not collapse the housing market, they do acknowledge that these added costs contribute to the existing challenges builders face.
Source: https://www.bbc.com/news/articles/c2emdm84xjko?at_medium=RSS&at_campaign=rss