Higher Chinese tariffs just made your home renovation much more expensive

Real Estate

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.

He said there is simply no way his business can absorb those costs and still survive.

“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.

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.

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