A new analysis from home improvement company Porch found the increase in tariffs on goods imported from China have the potential to add $17,000 to the overall cost of a newly constructed home, while remodeling projects could see an increase of 10 to 15 percent in total costs.
“Many of the key components in home building and remodeling are facing a higher tariff rate than in previous years, and the impact of those tariffs roll downhill to the end consumer who purchases or owns the home,” said Kyle Sandburg, Porch’s vice president of research and strategy. “Consumers should also expect a significant increase in the price of their construction and remodeling projects for 2019. From Canadian wood to steel, stone products – like granite, quartz, tiles – down to iron nails, the large swatch of products these tariffs encapsulate are the foundation to home construction and remodeling.”
Given the shifts in the U.S.’s trade relationships with partners such as China, there’s a chance tariff rates could reach as high as 25 percent if the two countries can’t come to an agreement by March 1, Porch noted in a news release. If the rates increase, homebuyers should expect to add an additional $5,000 to the cost of a new home.
“Another factor to consider is rising interest rates, which will only increase the total cost to homeowners,” Sandburg added. “Historically, as home buying becomes less affordable as prices and mortgage rates increase, people turn to remodeling to improve their current living space. Adding 10 to 15 percent to project costs could end up making remodeling out of reach for many people as well. Those considering a home improvement project in the upcoming year should consider locking in estimates with their home professional now.”
Launched September 2013, Porch is an online home improvement network connecting homeowners with professionals. Last year, the company facilitated over 2 million home-related projects.