Those who plan to remodel should lock in estimates now, expert says
The increase in tariffs on imported goods from China could add $17,000 to the overall cost of a newly constructed home, according to a report by home-improvement company Porch.
Remodeling projects, on other hand, could see a rise of 10% to 15% in total cost.
"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."
Tariff rates are anticipated to reach as high as 25% if the US and China can’t come to an agreement by March 1. Homebuyers should also prepare to pay an additional $5,000 toward the cost of a new home if rates continue to go uphill.
"Another factor to consider is rising interest rates, which will only increase the total cost to homeowners," Sandburg said. "Historically, as homebuying 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."