Saturday, June 30, 2018

Home Builders are Building Smaller Homes Because of Trump's Tariffs

Lumber is the biggest component of a new home. An average house last year had more than $60,000 in wood products.

Since early last year, lumber costs have shot up by more than 60 percent.

Much of that lumber price increase is because of the Trump administration's recently imposed 20 percent tariff on Canadian lumber and softwood products.

Higher steel prices caused by recent trade tariffs are also hammering builders, said Robert Dietz, chief economist of the National Association of Home Builders.

"Steel prices affect multifamily, single-family construction and remodeling, as well as appliances and components," Dietz said. "Tariffs acts as a tax on homebuyers and renters by increasing the cost of building and improving housing."

"We don't think we can pass 100 percent on to the consumer," said Jed Dolson, Texas region president for Dallas-based builder and developer Green Brick Partners. "We've tried to mitigate it by taking some features out of a home we would have provided a year ago — for instance hardwood floors in the master.

"The main way we are mitigating it is building smaller square footages on smaller lots."


(via The Dallas Morning News)

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