Dodge the Tariff Tsunami: How One Homeowner Outsmarted Rising Construction Costs
Anthony Cabrera celebrated a timely victory by finishing his newly-built three-bedroom home in Hopatcong, New Jersey, just before a set of new tariffs took effect on building materials and home items. Initially budgeting around $300,000, Cabrera watched his costs climb to $450,000 due to rising prices on imported goods like Asian cabinets, driven by the anticipation of these tariffs. His experience echoes the concerns of many buyers, builders, and renovators facing economic uncertainty in the housing market.
As President Donald Trump’s administration implements tariffs aimed at boosting domestic production, economists warn these levies may exacerbate existing struggles in the already weakened housing sector. With the introduction of tariffs on essential items such as imported kitchen cabinets, timber, and wooden furniture, experts like Peter Harrell of Georgetown Law School highlight the additional strain on construction costs, which are set to rise even further against a backdrop of high mortgage rates.
A recent report from Goldman Sachs anticipates that U.S. consumers will absorb as much as 55% of the tariffs’ costs, with companies expected to pass on the increased expenses in the coming months. Notably, major furniture brands like Restoration Hardware and IKEA have already signaled impending price hikes due to these tariffs.
Jean Lin, a design gallery founder, noted a drop in consumer spending due to tariff anxieties, while Michael Trubrig of Stillfried Design mentioned a 15% increase in prices for European-made furniture, attributing it to the broad range of tariffs affecting imports. Even though some businesses are adapting to rising costs, they fear for the long-term health of the industry, with affordable housing projects facing severe viability challenges as prices surge for both materials and labor.
Overall, experts suggest that while the new tariffs may not completely derail the home-building market, they certainly add yet another layer of complications to an already challenging environment.