If you're planning to build a deck or remodel a kitchen this fall, you might want to buy your materials right now. A trade dispute is about to hit the aisles of your local home improvement store. The conflict is driving up the price of two-by-fours and windows.
Big builders vs. the rest of us
It sounds strange to talk about rising building costs when the nation's giant corporate homebuilders are bragging about how cheap it is to build right now. Companies like Lennar recently reported their construction costs dropped 7% from last year, according to HousingWire. The biggest developers buy in such enormous volumes they can negotiate their way around supply chain hiccups.
But your local contractor doesn't have that kind of leverage. Neither do you when you push a flatbed cart through the lumber aisle. When international trade gets expensive, the extra costs flow straight downhill to regional builders and everyday homeowners. Big builders have the cash to lock in huge contracts months in advance. They completely bypass the spot-market volatility hitting your neighborhood hardware store.
What's actually getting taxed
The White House just signed orders to impose a steep new tax on goods coming from Canada. The administration blamed the move on disputes over dairy, cars, and wildfire smoke drifting across the border. Unless a last-minute deal is reached, these penalties take effect on August 19, as reported by USA Today.
This matters for your house because Canada supplies a huge chunk of American building materials. The new taxes will hit basic renovation staples like plywood and cement. Even the equipment needed to heat and cool your home is on the target list. When the raw ingredients of a house get this much more expensive, every bid for a bathroom remodel or a roof repair gets padded to absorb the blow.
This pile-on couldn't come at a worse time. Homeowners are already paying a steep premium on imported kitchen cabinets. A heavy tax on the copper pipes used in plumbing also took effect last year. Stacking a broad new penalty on top of those existing fees creates a huge headache if you're trying to fix up an older property.
The bottom line
- If you're gathering quotes for a fall renovation, lock in your bids and have your pro purchase the materials before mid-August. Understanding how contractors price their labor versus materials can help you negotiate a fair contract before the new taxes hit.
- Heating and ventilation equipment is a major target of these new penalties. If your air conditioner is on its last legs, replacing it now could save you a lot of money on your overall HVAC costs before the inventory gets repriced.
- Doing it yourself? Buy your lumber today. Storing a stack of wood in the garage for a few weeks is a small price to pay to keep the final cost of your home repairs from blowing past your original budget.