US home buyers could pay $17,000 more for a new home in 2019 due to tariffs

Wednesday, 13 February 2019 00:34:02 (GMT+3)   |   San Diego
       

Home buyers will potentially feel the impact of Donald Trump’s various tariffs when purchasing a new construction home in 2019, according to a report from home improvement website Porch.com. A new analysis from the company found existing new tariffs and a potential increase in tariffs on goods imported from China could add $17,000 to the overall cost of a newly constructed home, while remodeling projects could see an increase of 10 to 15 percent in total 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," said Kyle Sandburg, Porch's Vice President of Research and Strategy. "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."

Section 232 tariffs on steel and aluminum have already increased construction costs through 2018, and tariff rates for Chinese goods could reach as high as 25 percent if China and the US don’t reach a trade agreement by March 1. If the rates increase, the Porch report said, homebuyers should expect to add an additional $5,000 to the cost of a new home.

"Another factor to consider is rising interest rates, which will only increase the total cost to homeowners," Sandburg added. "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."


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