The trade war among the U.S., China, and Canada is having an effect on building sites as the tax on Canadian lumber has added an estimated $9,000 to the cost of a typical U.S. single-family home. Steel tariffs are also causing problems. "These tariffs make up about a $1 billion tax on housing," said Robert Dietz, chief economist of the National Association of Home Builders. Things could go from bad to worse as other key construction materials including natural stone countertops, vinyl floor coverings, ceramic tiles and asphalt roofing shingles become affected. Costs of all types of appliances, lighting fixtures, sinks, bathtubs, toilets are also expected to rise.
Last year, the residential construction industry imported more than $21 billion in products from China and an additional $45 billion from other countries. It's not just homebuilders who are sweating the growing trade wars.
Developers and commercial construction companies are also waving a red flag about rising tariff costs. "Is it going to kill the market? No," said Grant Pruitt with Dallas commercial property firm Whitebox Real Estate. "But you are going to see a price increase. The challenge we are having is all the prices keep going up, up, up."
Just this week, the Federal Reserve hiked interest rates for the third time in 2018, adding to the funding crunch developers and builders faced. Costs of everything from construction labor to land are also headed higher.
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