Homebuilders in the U.S. are reacting to President Trump's newly imposed tariffs, which are expected to increase construction costs significantly. Although the worst-case scenario has been avoided, builders anticipate an average cost increase of around $9,200 per home. The effective tariff rate has risen from 2.3% to 26%, affecting the overall housing market where new builds constitute a small but vital segment, especially in states like Idaho. Higher costs could lead builders to increase home prices or lower profit margins, potentially impacting construction activity.
"While the complexity of these reciprocal tariffs makes it hard to estimate the overall impact on housing, they will undoubtedly raise some construction costs," says Buddy Hughes, chairman of the National Association of Home Builders.
"A recent survey of homebuilders found that they expect an average cost increase of $9,200 per home due to the recent tariffs."
"If their construction costs rise, homebuilders could either try to pass the increase along to buyers or reduce their profit margins. Builder margins are already under pressure, and if they are squeezed too much, construction activity could decline."
"Nationally, the median sales price for new single-family homes was $414,500 in March, according to U.S. Census Bureau data."
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