Homebuilders and homebuyers are trying to nail down the cost of construction — but tariffs are making that more challenging.
The prices of materials used to build new homes were up 2.8% in July from the year before, according to federal data.
"During COVID we had trouble sourcing materials and right now during this tariff conversation we can source materials. It's just a matter of what the cost will be and what the cost delta will be from what maybe a client predicted, " said DPR Construction's Stephanie Wigger.
Steeper building prices paired with uncertainty about the economy because of tariffs could lead to fewer homes being built, says economist Odeta Kushi.
"If you're about to make the biggest financial purchase of your life, which is buying a home, you want to feel good about the outlook for the broader economy. And I just think that there's a lot uncertainty out there right now," Kushi said.
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According to new data out Tuesday from the Commerce Department, home-building jumped more than 5% in July.
But residential permits dropped nearly 3%, an indicator that building in the future could slow down.
"That permit data has been trending lower and I think that that's a sign of future weakness for the single family sector," Kushi said.
Tariffs could push up the cost of other construction projects too.
On Tuesday Home Depot said tariffs will lead to modest price increases on some of the items it sells.
