Higher China Tariffs “Hits Home,” Building Impacts Ahead, Per NAHB

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The cost of building and remodeling is about to rise – again, per CNBC. 

Builders from coast to coast, which includes HUD Code and other factory-builders, order products for housing they construct that are often sourced offshore, including from China.

So the tariff and trade war is about to hit home. Some pull quotes from CNBC today.

–      From tile to counter tops, laminates to lighting, all the fancy finishings — about 450 of them — are on the list that just went from 10% tariffs to 25%.

–      The additional costs then rose from $1 billion to $2.5 billion, according to an analysis by the National Association of Home Builders.

  • Nearly three out of four remodelers this year reported higher prices for customers due to higher costs for labor, according to a new survey from the National Association of Home Builders.
  • The latest increase in Chinese tariffs is hitting home remodelers where they live, and they are passing those higher costs on to clients.
  • From tile to counter tops, laminates to lighting, all the fancy finishings — about 450 of them, worth approximately $10 billion a year in expenditures nationwide — are on the list that just went from 10% tariffs to 25%. The additional costs therefore rose from $1 billion to $2.5 billion, according to an analysis by the National Association of Home Builders.
  • The increase is on goods shipped starting last Friday, so the hikes will not hit U.S. shores likely until the start of June. This buys negotiators a bit more time. Still, the tariffs are already hurting the remodeling business.

  • NAHB’s forecast calls for slowing growth, given declining home price appreciation and existing home sales volume, combined with rising construction costs,” said NAHB’s chief economist Robert Dietz.
  • At Case Architects and Remodelers in the Washington, DC area, CEO Bruce Case was already seeing some clients reduce the size of their projects after the first round of tariffs in order to rein in the budget.
  • At the end of the day, I can guarantee you the price of every project we do is going to go up,” said Case.
  • So it’s probably about a 7-8% increase to the consumer, and I would love to be able to eat some of that, but at this point I don’t know a way to engineer around that, to use different products that aren’t affected or anything like that,” Case said.
  • Builders were already struggling with a labor shortage, which also cost them more, and that is also getting worse. Nearly three out of four remodelers this year reported higher prices for customers due to higher costs for labor, according to a new survey from the NAHB.
  • Higher costs for both materials and labor are causing some consumers to reconsider their renovations. Case said the size of the average project went down dramatically last year, as consumers tried to cut the budget.
  • That’s my concern for this industry, we’re going to price ourselves out of the market,” said Case.
  • A real concern that hits home.

That said, there are flip sides to these points that CNBC’s report doesn’t address at all.

Manufactured housing sellers who are creative and successfully target the site-built buyer could stand to gain from these trade moves.

This news is one more reason why manufactured home pros need to dive deeply into HUD Secretary Ben Carson’s recent address.  In several ways, it points the path ahead for the industry’s professionals and investors.  At least it will for those who spotlight and tap into its power.

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To see Secretary Carson’s entire address, click here.

That’s this early evening’s “News through the lens of manufactured homes, and factory-built housing” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

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Submitted by Soheyla Kovach to the Daily Business News for MHProNews.com.

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