White House Attempts to Bring Down Construction Costs

Construction costs are rattling homebuilders. The White House is trying to do something about it, at least temporarily.

On Monday, Donald Trump signed a proclamation to adjust tariffs on steel, aluminum and copper imports, Supply Chain Dive reported. The reduced levies, which are also targeted towards the agriculture industry, will take effect on June 8.

Equipment related to building, like forklifts and residential HVAC systems, will soon be facing a 15 percent tariff after previously being dealt with a 25 percent levy. The changes are expected to remain in place until the end of next year.

“In my judgment, this modification appropriately accounts for these products’ roles in productive economic activity in the United States and accounts for recent circumstances affecting the relevant industries and services that use these products,” Trump said in the proclamation.

Additionally, beginning in 2028, imports will be eligible for a 10 percent tariff if 85 percent of the content consists of steel, aluminum or copper produced in the country, down from a 95 percent threshold.

It’s unclear if the temporary reprieves will be enough to get construction accelerated, particularly in the residential arena. The National Association of Home Builders did not immediately respond to a request for comment from The Real Deal.

Soaring prices for essential construction materials like copper, lumber, diesel and aluminum — driven by geopolitical turmoil, tariffs and supply-chain disruptions — have been raising homebuilding costs. Specific supply issues include record-high copper prices and a roughly 50 percent jump in diesel prices since late February.

The NAHB said 70 percent of respondents in its April confidence survey reported difficulty pricing homes because of volatility in material costs. PulteGroup executives warned investors that higher wood and metal costs are likely to hit home prices later this year, even as the company resists supplier fuel surcharges.

Single-family home construction fell across the country in the first quarter, according to the NAHB Home Building Geography Index, though multifamily construction largely bucked that trend.

— Holden Walter-Warner