Homebuyers in the U.S. were already facing significant hurdles to the American dream in 2018: higher interest rates, rising values, news tax laws and increased labor costs in the construction industry.
The headwinds will be that much stronger if President Trump goes ahead with new tariffs on steel and aluminum, housing experts say.
- Why steel and aluminum tariffs matter to the U.S. economy
- It's getting more expensive to buy a home
- New housing construction off to good start in 2018
- Home sales were down almost 8 percent in January
- Home sellers are making huge profits
- Younger buyers fuel surge in US homeownership
- Is 2018 the year to buy a house?
- The US housing shortage hasn't held back wealthy buyers
- Homeowners: Here's what's in the tax bill for you
- Here's why Trump's tariffs spooked markets around the world
"Tariffs could measurably raise the cost of building materials and hinder home construction of affordable homes," Lawrence Yun, chief economist of the National Association of Realtors, said in a statement.
Homebuilders are struggling to keep up with the demand for housing, and most metro areas of the country are woefully short of available homes -- despite residential construction rising to a 10-year high last year.
The Trump administration has already imposed duties of as much as 21 percent on Canadian lumber, which accounts for about a third of the softwood used in home construction in the U.S. According to Bloomberg, lumber prices are up more than 30 percent.
The levies the president announced last week could add 25 percent to the price of steel, which is used in flooring and foundations in single-family homes and parking garages and elevator shafts in most multi-family projects.
That will mean higher costs for homebuilders, said Randy Noel, chairman of the National Association of Home Builders (NAHB), which would be passed along to homebuyers.
“This announcement by the president could not have come at a worse time," he said. "Tariffs hurt consumers and harm housing affordability."
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