(WXYZ) — Homebuilders are watching closely as President Donald Trump's tariffs on Chinese imports go into effect and tariffs on Canada and Mexico are paused. They're weighing the impact it could have on the housing market.
“We've been through this before and I think we saw increases in appliances, increases in the cost of cabinets, increases in the cost of things you would never even anticipate because components themselves, even though they're assembled in the United States, are manufactured in China,” Kevin Gitter of 4th Dimension Development said.
Hear Kevin Gitter talk about the potential impacts in the video player below:
Gitter, a homebuilder, says tariffs on Chinese imports could drive up the cost for new builds. His company is constructing homes throughout Oakland County and they will especially feel the pinch in the coming months if the tariffs on Canada — currently on a 30-day pause — are enacted, driving up the cost of lumber.
“So, we haven't gotten to the point yet of stockpiling, but the conversations are going that way. So we're kinda watching how these weeks unfold,” Gitter said. “I think it just kind of hammers down that now is the time to buy if people are in the market because the price to build is going nowhere but up.”
The White House says Trump is looking to hold Mexico, Canada and China accountable to their promises of stopping illegal immigration and the flow of fentanyl and other drug into the states. He reached terms with the leaders of Mexico and Canada on Monday, resulting in a 30-day pause on tariffs that were set to go into effect Tuesday.
Previous coverage: Canadians voice frustration over proposed tariffs that are postponed for at least 30 days
If the proposed tariffs are enacted, homebuilders won't be the only ones feeling the pinch.
“The expense to remodel your home either before or after closing, that's what we're expecting the change to reflect in,” said Christina Gennari, a realtor and broker with Keller Williams Realty.
Gennari says sellers may want to think twice about remodeling their homes because with the potential increased cost to do so, they may not see the return on their investment that they would have in years past.
Jennifer Kafati anticipated the impact of the proposed tariffs during her house hunt. She and her family moved quickly to secure a move-in-ready home that they hope to close on soon.
“We wanted to make sure that we didn't have to pay for any remodeling and just the cost of remodeling a bathroom now a days is close to $25,000 to 35,000,” Kafati said.
As a builder, Gitter says consumers could see the impact of higher prices on Chinese products in the coming months as suppliers' inventory dwindles and they re-up on those goods at higher costs.
