DEKALB COUNTY, Ga. — President Donald Trump has repeatedly called today “Liberation Day” with promises to roll out tariffs on imports from other countries, which he says will free the U.S. from relying on foreign goods.
Economists and builders agree it will increase the cost of vital construction materials like lumber from Canada.
Channel 2′s Michael Doudna spoke with industry experts. They said money is just one part of the equation.
The other part is uncertainty. Most everyone in the industry agrees that building homes will soon cost more.
But how do you plan future projects when you don’t know what the future cost of goods will be?
Monte Hewett is a home builder with projects all over metro Atlanta.
He said tariffs are just the latest challenge for builders that have seen prices rise on everything from materials to land.
“How do you plan for it? I mean, the business is, we don’t build houses in a day,” Hewett said. “I don’t know, already, the biggest issue in the market is affordability. And I don’t know where we are going.”
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According to the National Association of Home Builders, the cost of building materials has already risen by 34% since December 2020
If the tariffs go into effect, the association says that could cost builders an estimated $9,200 per home.
Ray Hill is an emeritus professor at Emory University. He said part of the sharp increase is that the United States just cannot produce lumber as cheaply as its northern neighbors.
“(Canada) has a natural comparative advantage... vast country, lots of timber with no one living near it,” Hill said. “When prices go up, demand falls. So yeah, we are going to buy less automobiles and we are going to buy less houses because the cost of living is going to go up as a result of these tariffs.”
For builders like Hewitt, he said the housing market will adapt, adjusting strategies to deal with potential higher costs and changing demand.
“You have to change your business model every day,” Hewitt said.
Hewitt said several factors even before tariffs were an issue, such as rising costs, led him to diversify his portfolio - doing things like building out townhomes designed to be rented or focusing more on micro-markets that may have less risk.
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