How are tariffs affecting custom home building costs in Texas?
Tariffs are significantly impacting custom home building costs in Texas, with new duties on imported materials like steel, aluminum, and lumber raising construction expenses. This has led to increased home prices, particularly affecting custom-built and energy-efficient homes.
Though the markets are always changing, materials costs are currently increasing and fluctuating at a greater pace and scale than we have seen in our 50 years in business. We understand building a custom home can be a stressful endeavor at any time so we are here to help you navigate the process with as much ease as possible.
Here are a few more in depth resources on how tariffs are impacting Texas home building costs:
San Antonio Express-News: Here’s how tariffs could hurt homebuyers and builders in Texas
MarketWatch: Car shoppers and home buyers face higher prices – no matter what happens in the court fight over tariffs
Barron’s: Trump Campaigned on Lowering Housing Prices. His Policies Could Push Them Up.
The Tariff Effect: A Breakdown
The U.S. has imposed tariffs on key construction materials, greatly affecting home building costs:
- Steel and Aluminum: At this time, tariffs have increased up to 50%, raising costs for structural components and appliances. Reuters
- Canadian Lumber: Tariffs now approach 40%, affecting framing and other wood elements. Wilson Lewis
- Mexican Gypsum: Tariffs on gypsum, essential for drywall, have increased, impacting interior construction costs. National Association of Home Builders+1homebuildersassociation.org+1
These tariffs have led to a projected 4% to 6% increase in construction costs, adding approximately $17,000 to $22,000 to the price of a new home. NBC 5 Dallas-Fort Worth
Regional Impact: North Texas and Beyond
In Amarillo, custom home builders report construction cost increases of 10% to 15%, translating to an additional $20,000 to $40,000 per home. Energy-efficient features, reliant on imported materials, have seen price hikes of 5% to 8%. WSJ+3bmamarillohomes.com+3bmamarillohomes.com+3
Non-profit organizations like Habitat for Humanity in San Antonio face challenges as increased material costs and reduced federal support may force reductions in affordable housing projects and add to housing pressures. Nitin Gupta DFW+3San Antonio Express-News+3Houston Chronicle+3
Industry Response and Adaptation
Builders like us are adopting strategies to mitigate tariff impacts:
- Domestic Sourcing: Utilizing U.S.-made materials to reduce reliance on imports when possible.
- Alternative Materials: Exploring substitutes like engineered wood and recycled steel.214cap.com+1texaspaceauthority.org+1
- Prefabrication: Implementing modular construction to decrease waste and labor costs. 214cap.com
These adaptations aim to control costs and maintain project viability amid rising expenses.214cap.com+1texaspaceauthority.org+1
Looking Ahead
The continuation of tariffs poses ongoing challenges for Texas’s home building industry, potentially exacerbating housing affordability issues. We will continue to navigate these economic pressures through innovation and strategic planning to sustain growth and meet housing demands. Now more than ever, it’s important maintain an open dialogue with your architect and home builder to stay up to date on expectations and options.