The Real Deal National

Homebuilder blues: Fed chair says Trump’s tariffs, immigration taking a toll

Tariffs, labor shortages and material price rises have made building new homes more expensive
July 12, 2019 07:30AM

Jerome Powell (Credit: Getty Images and iStock)

Jerome Powell (Credit: Getty Images and iStock)

Over the past few months, President Trump has been venting on Twitter and elsewhere about his displeasure with the Federal Reserve.

But on Thursday, Fed Chair Jerome Powell had something to say about the president. Powell said some of Trump’s policy moves are significantly hurting a vital part of the U.S. economy: the housing industry.

Speaking at a Senate Banking Committee hearing in Washington, Powell said immigration and tariffs combined with rising material costs are making it more difficult for homebuilders to build homes affordably, according to CNBC.

Replying to a question from Minnesota Democratic Sen. Tina Smith, the chairman said: “Now you have a shortage of skilled labor, so it’s hard to get people on the job, electricians, plumbers, carpenters and other people. No matter what you pay them, just finding people to do that work,” Powell said.

Smith asked Powell if he thought “our immigration policy might have something to do with that.”

Powell replied, “That’s what we hear from homebuilders. That’s part of it for sure.”

Powell’s comments echo concerns heard from homebuilders and housing experts across the country that it is difficult to find labor to build new single-family homes.

Last month, giant homebuilder Lennar said that tariffs on Chinese goods are costing the company an average of about $500 per home.

In May, new home starts fell 6.4 percent from April, and were 12.5 percent lower than May 2018, according to the U.S. Census. [CNBC]Keith Larsen