A quarter of large renovation projects could be scrapped or considerably scaled back because tariffs make them cost-prohibitive, according to new research from Zonda.
“We think the industry should be prepared for an increase of about 9.3%,” said building product specialist Todd Tomalak. “That takes into account not only direct costs from tariffs but also baseline inflation and knock-on costs from domestic manufacturers.”
The building industry is trying to determine how President Trump’s tariffs on countries such as China will affect prices. It’s difficult to forecast because the targets have changed several times, contributing to uncertainty for families considering renovating their homes.
Tomalak said 27% of large projects could be canceled or downgraded (such as a kitchen remodel downscaling to an appliance refresh). About 20% of smaller projects could be downgraded to simple repair projects.
“Consumers are more price-sensitive since mid-2024,” he said. “That’s due to depleted pandemic-era savings, higher debt service payments, and mortgage rate increases. Homeowners have finite money, and rising costs in one product can spill over into reduced spending on other products, even if those products have no direct tariff exposure.”
Zonda research shows window and door upgrades are the most sensitive to price changes, while flooring and electrical are less sensitive.
The latest Building Product Outlook includes a new industry forecast, with a special focus on how volatility will impact the building products industry as well as an analysis of mix shift, alternative scenarios, and deferral. The full report is available to clients of Zonda’s Building Product Outlook. You can learn more and subscribe here.
