How the New Imported Steel Tariffs Could Make Homes More Expensive
By Maggie Wilson @ Real Estate Daily
March 6, 2018

Homebuilders are struggling to keep up with record-low levels of housing inventory, and their jobs just got even harder. President Donald Trump announced last week a new tariff on imported steel and aluminum, which could hike prices for essential home construction materials even further.

Key Takeaways

  • Home builders have been struggling with rising prices for construction materials for months
  • The new tariffs would tack on an additional 25% to the cost of steel and 10% to aluminum
  • Builders will start looking into alternative materials if there is a shortage of steel or prices rise
  • The National Association of Home Builders strongly denounced the new tariffs


The planned tariffs would tack on 25% to the cost of steel, used in home foundations, floors, and high-rise construction, and 10% for aluminum from foreign suppliers. The controversial tariffs would make good on Trump’s campaign promise to give American producers a boost.

The administration is already levying tariffs of more than 20% against Canadian soft lumber producers. About a third of the softwood lumber used in new-home construction comes from Canada. And after devastating hurricanes in Houston and Florida and deadly wildfires in California, there is a big need for that lumber.

“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.

There are alternative materials that builders can use if there is a steel shortage or if prices rise. But those newer materials are typically more expensive, says Jack Kern, director of research at Yardi Matrix, a commercial real estate data and research firm based in Santa Barbara, CA. There are also fewer construction crews trained in how to properly use those materials, Kern says.

“Given that home builders are already grappling with 20% tariffs on Canadian softwood lumber and that the price of lumber and other key building materials are near record highs, this announcement by the president could not have come at a worse time,” Randy Noel, chairman of the National Association of Home Builders, said in a statement. “Tariffs hurt consumers and harm housing affordability.”

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