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Yahoo
2 days ago
- Business
- Yahoo
Fight over lumber tariffs could reshape future of US home building
Lumber is in the spotlight as the National Association of Home Builders (NAHB) and the U.S. Lumber Coalition disagree over what's behind the U.S. housing market slump. FOX Business correspondent Kelly Saberi reported Monday that the NAHB has pointed to tariff uncertainty and lumber prices as being partly responsible. The U.S.'s current anti-dumping and anti-subsidy duty on imported Canadian softwood lumber stands at 14.5%. It could potentially climb later in the year to nearly 35%. Canada's softwood lumber makes up roughly 85% of America's imports and almost a quarter of the U.S. supply, according to the NAHB. "I share President Trump's desire to create fair and balanced trade across our borders, certainly would bring back as much production as we can," NAHB CEO Jim Tobin said. "But until we do that, and it will take years and millions of dollars of investment, we need to make sure that we have a reliable, affordable source of lumber." Saberi reported that the U.S. Lumber Coalition "says that the price of lumber says something different about this story." Read On The Fox Business App Between May 2021 and April of this year, the random lengths framing composite price decreased 67%, she reported. It stood at $442 per 1,000 board feet as of May 23, per the NAHB. Meanwhile, the price of new homes has gone up 21%, Saberi reported. "Everything from regulatory costs to the cost of land and, quite frankly, also the cost of home builder profitability rates that have gone up, those are actually the driving forces of home affordability," U.S. Lumber Coalition executive director Zoltan van Heyningen told FOX Business. "Lumber just isn't one of them." Click Here To Read More On Fox Business The U.S. Lumber Coalition has also been critical of Canada, saying that "ongoing unfair trade practices" by its lumber industry have been "extremely harmful to U.S. lumber producers, workers, and their forest-dependent communities." John Kalabich, the owner of Acme Lumber in Chicago, told Saberi he was able to keep prices relatively flat over the past 12 months because of the duty on Canadian lumber. He has also heard from contractors that the demand for small repair work and big-ticket construction has gone down. Trump Issues Executive Orders Addressing Lumber Production, National Security Concerns Last month, the U.S. Census Bureau said single-family housing starts suffered a 2.1% decline from March to a seasonally adjusted annual rate of 927,000 in April. Sales of new single-family homes in April came in at a seasonally adjusted rate of 743,000, while sales of existing ones were 3.63 article source: Fight over lumber tariffs could reshape future of US home building
Yahoo
3 days ago
- Business
- Yahoo
How Trump's Tariffs and Immigration Policies Could Make Housing Even More Expensive
President Donald Trump owes his second electoral victory, in no small part, to voter frustration over the rising cost of living. Over the course of Joe Biden's presidency, the price of a typical American house increased by nearly 40 percent, and rents followed a similar trajectory. As of 2024, approximately 771,480 Americans lack reliable shelter—at once a new high and a new low. All of these issues are most acute in states governed by Biden's fellow Democrats. In California, the median home price is now more than 10 times the median household income. Economists generally view three to five as a healthy ratio. Polling data suggest that many key voting blocs in the 2024 presidential election were primarily motivated by the rising cost of living and by out-of-control housing costs in particular. For all the network news preoccupation with transgender athletes and campus protests, it was mortgages and rents—the single largest line items in a typical household's budget—that moved voters to toss out incumbents. On April 2, after months of empty threats and false starts, the administration finally launched its global trade war, including a 25 percent tariff on various goods from Canada and Mexico. But Canadian softwood lumber and Mexican gypsum used for drywall—the (literal) pillars of a typical American single-family home—would be exempt. The National Association of Home Builders (NAHB) was quick to celebrate it as a win: Canada accounts for 85 percent of all U.S. lumber imports. If the tariffs had taken effect as planned, the per-unit cost of a home might have increased by as much as $29,000. In a sector characterized by thin margins, that would have meant a lot of idle construction sites. And yet the partial rollback will offer only a temporary reprieve. Tariffs already in effect will increase the cost of a new home by $10,900 on average, according to an April 2025 estimate by the NAHB—an increase of $1,700 over its March estimate. This is on top of a 41.6 percent increase in building materials since 2020, brought on by pandemic-related supply chain disruptions. Those cost increases could hit renters hardest. After a decade of underbuilding in the wake of the 2008 financial crisis, America is short roughly 5 million homes—most of them apartments. Perhaps the most robust finding in urban economics is that when vacancy rates increase, rents fall. But driving up vacancy rates requires cities to build more housing. Thanks to the YIMBY ("yes in my backyard") movement, a handful of cities—including Austin and Minneapolis—have recently had building booms that have brought prices back down. But those cities have been the exception. Meanwhile, a new wave of tariffs is about to make it a lot more expensive to build. On February 11, the administration imposed a 25 percent tariff on steel and aluminum—much of it imported from allies such as Brazil and Germany. On February 25, the administration announced an investigation into copper imports, presumably with future tariffs in the works. Depending on their country of origin, other key inputs like iron and cement are also now subject to steep tariffs. Even if you can get new housing built, the appliances needed to make all these new homes livable could soon cost hundreds of dollars more. Not only are microwaves, refrigerators, and air conditioners now more expensive to import, but tariffs on key inputs mean they are also more expensive to produce domestically. Uncertainty around tariffs has put many construction projects on pause, sending homebuilder stocks plummeting. Many small, local developers are exiting the market altogether. Following in the mold of autarkic Cuba—where international trade is strictly limited and medical doctors drive taxis for a living—your next Uber driver could very well be an out-of-work former developer. Never mind that the typical American city desperately needs them to build. If tariffs weren't bad enough, the administration's program of mass deportations could kick the housing crisis into overdrive. As things stand, the construction industry is already short 250,000 workers. This is partly a legacy of Trump's first term, in which an immigration clampdown suppressed what might have been an overdue housing construction boom. Even today, approximately 30 percent of construction workers are immigrants, many of them undocumented. In California, which is already a basket case on housing affordability, immigrants make up 41 percent of all construction labor. In Texas—one of the few bright spots for housing affordability in recent years, thanks to an ongoing construction boom—nearly 60 percent of all immigrant construction workers are undocumented. If 2024 was any indication, expecting voters to put up with all this in 2026 is a risky gamble. On some level, the Trump administration must appreciate that this is an existential threat. And yet its current proposals are out of sync with the scale of the housing crisis: Releasing more federally owned lands for housing development remains the only proposal the administration has seriously offered up to address the housing shortage. It's a fine enough idea if properly designed. But it would, at best, provide only modest relief to a handful of Western cities. Worse yet, the administration seems to have regressed to the implicitly regulatory "protect the suburbs" rhetoric that so failed Trump in the 2020 election. In February, Department of Housing and Urban Development (HUD) chief Scott Turner announced that he would be scrapping the Affirmatively Furthering Fair Housing (AFFH) rule in order to "cut red tape" and "advance market-driven development." Except the rule was essentially just a reporting exercise that required local governments to disclose—and ideally remove—local red tape standing in the way of housing. In 2018, then–HUD Secretary Ben Carson embraced the AFFH rule as a way of nudging cities to remove regulatory barriers to housing production, as part of his brief flirtation with YIMBYism. In a move that would make Orwell blush, Carson joined Trump in a Wall Street Journal op-ed two years later announcing that they would "protect America's suburbs" and scrap the rule if reelected. Trump lost that election. It's all a very strange state of affairs—a developer in chief with evidently little interest in getting America building again. It didn't need to be this way. Over the course of the first Trump administration, housing production recovered at a steady clip, with a muted increase in housing costs as a result. The administration's deregulating zeal could have been focused on unnecessary federal mandates that increase costs. Instead, the United States is poised to experience a run-up in housing prices through 2028 that could make the pandemic-era increases like a minor blip. So what could the federal government do? From a constitutional perspective, not much. The bulk of the blame for America's housing crisis lies with local governments that maintain onerous zoning regulations and unpredictable permitting processes—and the state governments that control them. The federal government has little role to play in zoning, even if it once did a lot of the heavy lifting to promote it. But that isn't to imply there is nothing the federal government could do. In recent years, the idea of tying federal dollars to local deregulation has gained acceptance within the Beltway. Bills with unsubtle names like the "Build More Housing Near Transit Act" or the "Yes In My Backyard Act" would variously condition money for transit or other public facilities on local jurisdictions cutting back on red tape. At the same time, the federal government could turn up the tax pressure. If homeowners in cities with high costs and low production were suddenly ineligible for benefits like the mortgage interest deduction or the state and local tax credit, it would transform the local politics of housing. Homeowners who might otherwise be fully bought into government constraints on housing production could flip their script. More likely, however, the onus will fall on state and local legislators to pull out all the stops on housing production. State and local elected officials can't control tariffs or immigration policy. But they can control "make or break" factors such as zoning regulations, permitting timelines, and impact fees. According to a recent RAND study, variations in these policies explain why it's nearly twice as expensive to build housing in California as in Texas. At least some state legislators are rising to the occasion. In recent months, states as diverse as Republican-supermajority Montana and Democratic-supermajority Washington have moved forward legislation restricting the right of local governments to block housing. Even California is starting to see the light. All these bills will help to get more housing built, no matter what's happening at the federal level. The Trump administration had better hope those state-level efforts are successful—and scrap the trade and immigration policies that could plunge America into another housing crisis. The post How Trump's Tariffs and Immigration Policies Could Make Housing Even More Expensive appeared first on
Yahoo
27-05-2025
- Business
- Yahoo
Pressure building for homeowners as renovation industry gets hammered by supply chain chaos thanks to tariffs
Tariffs are hammering the home renovation industry, pushing designers, contractors and homeowners into a financial crunch as rising costs create chaos in the supply chain. Chad Esslinger, an interior designer based outside Chicago, says the pressure has been building ever since President Donald Trump introduced sweeping global tariffs in early April. Costs have been creeping up for Esslinger, telling CNN that one key supplier, providing lighting, rugs and furniture, slapped a 14% 'temporary tariff surcharge' on Chinese imports and 2% on goods from any other countries starting May 12. Another vendor dealing in fabric and wallpaper also warned of imminent price hikes. Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) 'I've seen it where sometimes they don't even warn you,' he said. 'I've gone to a website to look at a product I might have sourced a month ago, and now suddenly it's a certain percentage more.' To survive, Esslinger says the price hikes can't be absorbed; they have to be passed on. 'Just like everything,' he said, 'you have to pass that cost along if you want to stay profitable.' The home renovation market has thrived in recent years, bolstered by an aging housing stock and fewer new builds. But that growth is being threatened by U.S. trade policy. In 2024, China exported more than $438 billion worth of goods to the U.S., with nearly 19% of that total in machinery and appliances, including refrigerators, dishwashers, laundry machines, and another 4% in furniture and lighting, according to the U.S. International Trade Commission. A recent agreement between the U.S. and China has temporarily lowered that rate to 30% for 90 days, but the broader market remains unsettled. Blanket 10% tariffs remain in effect for many other trading partners, and those rates could climb again after July 9. 'It's top of mind at this point. On the contractor side, they're waiting to see how it unfolds,' Julie Kheyfets, CEO of Block Renovation, a platform that connects homeowners with contractors, told CNN. 'The thing about renovations is, every renovation is different. You can't stock a bunch of extra materials ahead of time, because every homeowner wants something different.' That uncertainty has made it harder for businesses to plan and for customers to commit. The U.S. home remodeling market is still expected to grow in the coming years, according to fresh projections from the National Association of Home Builders (NAHB). The NAHB forecasts a 5% increase in residential remodeling activity for 2025, showing resilience in the face of economic and trade policy volatility. The growth, they say, is being driven by factors like aging housing, high home equity levels and an aging demographic. But despite the projections, professionals like Esslinger say the lack of clarity is causing delays. 'The word that just keeps coming up is uncertainty,' he said. 'I've had some clients say they're going to hold off for a little bit and see how things go, while some have scaled back a little bit.' Not everyone is seeing the same level of impact. Nina Sepiashvily, who runs I&N Builders in New York City, says that while she's noticed a slight uptick in costs, it's nothing compared to the price surges triggered by post-pandemic inflation. Her focus is more on structural materials like lumber, rather than imported furnishings. Tariffs on Canadian lumber, a key import for the U.S., sit at 14.5%, but the U.S. Department of Commerce has proposed more than doubling that rate to 34.5%. 'We haven't really seen [tariffs] affect our costs yet,' Sepiashvily said, 'Homeowners are uncertain about tariffs, they're uncertain about their investments and they're afraid to pull the trigger.' But in New Mexico, interior decorator Sandy Schargel experienced the ripple effects firsthand when a lighting company canceled a large order due to tariff-related product discontinuations. Replacement options came with a 10% markup. Schargel says the loss of access to more affordable imported items means she now often looks to American-made alternatives in a shift that may drive up costs for budget-conscious clients. 'When you come to the lower price points, American-made does limit things, somewhat,' she said. 'Imported merchandise often has lower price options.' She's now telling her clients to buy early. 'I've told people to order what they need as soon as possible to avoid prices going up further down the line,' she said. As for Esslinger, he hasn't seen any price relief. 'No home goods importers I work with have said they plan to lower prices,' he said. Read more: This is how American car dealers use the '4-square method' to make big profits off you — and how you can ensure you pay a fair price for all your vehicle costs If you're planning a home renovation in 2025, you're likely feeling the squeeze of rising material costs and ongoing tariff volatility. But, with the right strategy, you can still make your dream remodel a reality without blowing your budget. Here are four ways to protect your wallet and stay on track: Renovation costs can escalate quickly in today's market. Experts recommend adding a 15% to 30% contingency to your budget to account for unexpected costs, like price hikes in materials. Use budgeting tools, whether spreadsheets or apps, to monitor every dollar spent and keep your project from spiralling out of control. Global supply chains remain unpredictable, and tariffs are making some imports pricier than ever. You can choose U.S. lumber or steel, which tend to be less tariff-sensitive. You can also work with local suppliers to cut down on shipping costs. Renovations are a big-ticket item, but there are smart ways to finance them, like home equity lines of credit (HELOCs), home equity loans, which offer fixed-rate options or personal loans, if you have strong credit and want to avoid tapping into home equity. Don't settle for the first contractor you meet. Make sure to get multiple bids and ask for itemized estimates to see exactly how much is being allocated to materials, labor and overhead. This can help you spot markups, negotiate better rates and make informed comparisons. While the pause in the highest tariffs offers some relief, many in the home renovation business are preparing for continued volatility. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Epoch Times
23-05-2025
- Business
- Epoch Times
1 in 7 US Home Purchase Deals Were Canceled in April: Redfin
Around 56,000 agreements to purchase homes were canceled across the United States last month amid an environment of economic uncertainty and high housing costs, according to real estate brokerage Redfin. The canceled agreements made up one in seven (14.3 percent) of homes that went under contract in April, higher than 2024's 13.5 percent, Redfin said in a May 22 'Redfin agents report that some buyers are getting cold feet due to widespread economic and political uncertainty. Tariffs, layoffs, and federal policy changes are among the factors prompting people to stay put instead of move,' the brokerage said. The downturn in buyer sentiment is happening as the housing inventory is at a five-year high. Despite adequate supply, demand is slowing, 'meaning the buyers who are in the market often have room to negotiate,' Redfin said. 'Some house hunters are backing out during the inspection period because a better house has or might come along.' Meanwhile, both home prices and mortgage rates remain 'stubbornly high,' the company said. Related Stories 5/21/2025 5/21/2025 The average sales Among the 44 major U.S. metropolitan areas analyzed by Redfin, Atlanta ranked first in terms of canceled deals, with one in five pending home sales falling through last month. This was followed by Orlando, Tampa, Riverside, and Miami in Florida. In a May 22 On the plus side, 'the pullback will likely be short-lived with Zillow anticipating 4.12 million home sales in 2025—that's 1.4 percent higher than in 2024,' it said. 'Zillow data confirms a small rebound in the number of homes going under contract in the first two weeks of May. The early May data suggests that perhaps this year's peak home shopping activity may have been delayed.' Housing Affordability According to the National Association of Home Builders (NAHB)/Wells Fargo Cost of Housing Index, a family making $104,200—the nation's median annual income—had to set aside 36 percent of their earnings to meet mortgage payments on a median-priced new home in the first quarter this year, NAHB said in a May 22 'The Cost of Housing Index clearly shows the need for policymakers to take action to address the nation's housing affordability crisis by enacting policies that will allow builders to increase the nation's housing supply,' said NAHB Chairman Buddy Hughes. 'Eliminating burdensome regulations, ending tariffs on Canadian lumber and other building materials, providing funding to promote careers in the skilled trades, and expediting approvals for affordable projects will allow builders to construct more homes.' Meanwhile, there is uncertainty as to how low mortgage rates could fall given the recent downgrade of the United States' credit rating by Moody's. The rating agency The weekly rate on a 30-year fixed-rate mortgage has risen consecutively for the past two weeks and was at 6.86 percent for the week ending May 22, the highest level since around mid-February. In a May 22 'Pent-up housing demand continues to grow, though not realized. Any meaningful decline in mortgage rates will help release this demand.'
The Hill
22-05-2025
- Business
- The Hill
Trump considering ‘bringing Fannie Mae and Freddie Mac public'
President Trump said Wednesday he was considering making two giant government-sponsored home lenders public. 'I am giving very serious consideration to bringing Fannie Mae and Freddie Mac public,' Trump wrote in a Wednesday post on Truth Social, adding that he would make a decision in the 'near future.' The president unsuccessfully attempted to release the two entities from government control during his first term in 2019. Fannie Mae and Freddie Mac were originally created by Congress but remained private companies funded by the U.S. Treasury until the housing market crash in 2008. Trump said the companies are now ready for a change. 'Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right. Stay tuned,' the president wrote in his Wednesday post. Housing affordability remains out of reach for many American families, with the median price of a new single-family home in the U.S. about $460,000, according to the National Association of Home Builders (NAHB), a trade group for residential construction companies. Mortgage rates sit at 6.5 percent, with current underwriting standards from banks reflecting the cost is out of range for about three-quarters of all U.S. households, the NAHB found in March. Experts have warned that privatizing Fannie and Freddie could cause mortgage rates to skyrocket. However, some advocacy organizations have argued the move could boost development and expand home ownership opportunities for the middle class. Trump said he would consult Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and the Director of the Federal Housing Finance Agency William Pulte before making a final decision on how to move forward.
