Home builders throughout the U.S. have seen stratospheric price increases on steel, aluminum, lumber and other core housing materials this summer due to tariffs imposed by the Trump administration, and experts say the industry is bracing for continued pain, as the president appears likely to move forward with a proposed tax on at least $200 billion worth of goods imported from China.
The tariffs put in place this spring on materials like steel and aluminum—the result of President Donald Trump’s hardline stance on international trade—have already added roughly $9,000 to the build cost of a new home, based on an average U.S. home price of $285,000, said Jerry Howard, CEO of the National Association of Home Builders.
While the luxury housing sector is certainly not excluded from that impact, it has felt the pain somewhat less than the general housing market, experts said, since materials like nails and concrete are a smaller percentage of the overall cost of a luxury project.
Impact on design Where the tariffs have hit home in the luxury market is in design details, particularly in multi-family dwellings.
Since the Trump administration imposed 25% tariffs on steel and 10% tariffs on aluminum from Europe, Canada and Mexico in June, developers’ willingness to include lavish details, like exterior metal siding, has appeared to wane, said Peggy Marker, president of Marker Construction Group in Fort Lauderdale, Florida.
The company builds custom homes and penthouses that cost between $5 million and $50 million, in addition to commercial construction. "In the past, where you might have had a lot of decorative metal on the outside of the house, particularly railings or metal screens, that kind of thing, they’re changing that to other [materials]," she said, including glass, stone and imitation wood.
Plans call for 72 units listed for sale from about $2 million each, and a small change in the shape of the decorative metal on the balconies—from wavy lines to straight lines—made a significant difference on the developer’s bottom line, she said, though it didn’t affect the listing price.
It would place import taxes between 10% to 25% on $200 billion worth of goods imported to the U.S. from China, pending a White House review of public comments submitted during a period that ended Thursday. "And although it won’t really impact the high end of the housing market anywhere near severely, housing affordability across the board will take a hit and that’s a bad public policy position and a bad economic outlook."