HOUSTON – New tariffs imposed by U.S. President Donald Trump are expected to impact many areas of the American economy, and experts across numerous industries are gearing up for their potential ramifications. One of these industries is construction.
Adam Ashman, president of the Greater Houston Builders Association, says the impact of tariffs is currently limited, primarily affecting products imported from China, such as hardware and lighting.
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“What we’re seeing is some upward pressures on products coming from China right now,” he said.
He emphasized that while the effects are manageable for now, they are creating uncertainty and volatility in the market.
When asked about specific materials causing issues, Ashman clarified that while there are pricing impacts, he does not believe any materials are causing significant problems at this time.
“We’re seeing the pricing impacts... primarily Chinese manufactured products such as lighting hardware,” Ashman explained.
Regarding project delays, Ashman mentioned that he has not heard of any projects being postponed or canceled due to the tariffs. Instead, he observed that potential customers are hesitant to proceed with new projects because of the prevailing uncertainty in the market.
“People are just a little hesitant to jump in,” he explained.
Reflecting on past experiences, Ashman compared the current situation to the challenges faced during the COVID-19 pandemic, when there were significant material shortages and price increases. He noted that uncertainty in any market can lead to price volatility, causing buyers to pause their decisions.
When discussing strategies for managing rising costs, Ashman acknowledged that builders have limited options.
“Ultimately, the uncertainty and the increases in product costs are really what’s going to drive those bottom-line prices,” he said.
He added that builders often have to absorb these costs and pass them on to customers, which can lead to increased home prices and reduced affordability.
Ashman provided some statistics on material sourcing, stating that about 7% of construction products are imported from outside the United States. He mentioned that approximately $204 billion is spent annually on construction products, with $14 billion coming from foreign sources. This highlights the challenges builders face in sourcing materials locally.
As for the potential for price increases, Ashman indicated that while there has been speculation, actual increases have not yet been widespread. He estimated that the current increases could be around 5% to 10%, primarily in the form of surcharges rather than baseline price hikes.
He explained that surcharges are additional costs imposed due to tariffs, rather than permanent price increases.
“It’s an extra cost... we’re still going to say your cost is a dollar, but we’re going to charge you a 50-cent surcharge on top of that,” he clarified.
In terms of demand for homes, Ashman expressed concern that the uncertainty caused by tariffs and rising costs could deter potential buyers.
“That uncertainty is partially due to the upward pressure on pricing that we’re seeing,” he said.
Looking ahead, Ashman shared his hopes for the future of housing affordability. He emphasized the need for relief from rising interest rates and tariffs to ensure that homeownership remains attainable for future generations.
“Housing affordability and attainability... has to be front and foremost,” he stated.
Ashman addressed the suggestion of sourcing materials locally. He noted that while there is a push for local sourcing, the reality is that many materials are still manufactured outside the U.S., making local sourcing a challenging option.
He highlighted the ongoing uncertainty in the construction market due to tariffs and rising costs. He urged stakeholders to focus on maintaining housing affordability and ensuring that future generations can achieve the American dream of homeownership.
