While new luxury homes are not exempt from the impact of the Trump Administration’s new tariffs on core housing materials, said impact is a smaller percentage of the overall cost of a luxury home than it is for the U.S. average.
Dan Dunmoyer, the president and CEO of the California Building Industry Association, notes that the tariffs have added between $10,000-$20,000 to the cost of an average California home, defined here as a home with four bedrooms and two bathrooms.
While these duties add between 5% and 6% to the cost of an average home, they may only increase the price of a California luxury home by 1% or 2%."The impact has been minimal" on the luxury market, Dunmoyer says. "If you can write a check for $3.8 million, you can write a check for $3.85 million easily."
Where the tariffs have hit home in the luxury market is in design details, particularly in multi-family dwellings. Since the Trump administration imposed 25% tariffs on steel and 10% tariffs on aluminum from Europe, Canada and Mexico in June, developers’ willingness to include lavish details, like exterior metal siding, has appeared to wane, said Peggy Marker, president of Marker Construction Group in Fort Lauderdale, Florida.Read More