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CBS News
15 hours ago
- Business
- CBS News
Tariffs are pushing remodeling costs up. Here are some ways to save money.
How tariffs are reshaping the cost of remodeling this summer Tariffs are pushing up the cost of materials that are frequently used in home renovation projects, leading some homeowners to reconsider fixing up their residences. Suppliers of materials, including lumber, steel and aluminum, have already hiked prices for builders. Sixty percent of homebuilders say suppliers have either already raised prices or intend to, according to data from the National Association of Home Builders (NAHB) and Wells Fargo's April 2025 Housing Market Index. They attribute the price hikes to the Trump administration's sweeping levies on the U.S.'s trade partners. Extra costs for materials can add up quickly, leading to a typical price increase of around $10,000 per home renovation project, according to the NAHB. Pre-ordering materials, before prices rise, is one way to save on roofing supplies such as shingles, according to Connecticut-based builder David Perotti, founder of Fine Home Contracting. He told CBS News that he saved a "few thousand dollars" on behalf of a client by ordering the roofing shingles early. Most materials that are used to build homes in the U.S. are imported, Perotti explained. For example, one-quarter of the country's available lumber supply comes from Canada, and could be subject to a 15% levy. Steel and aluminum are integral to building roofs, homes' plumbing systems, electrical equipment and HVAC systems. Tariffs of 50% on steel and aluminum took effect earlier this month and can apply to everything from coil roofing nails to metal flashing used to prevent leaks. Perotti's advice to homeowners looking for a refresh is to press pause on purchasing new appliances, and opt for a fresh paint job, which can go a long way toward making a home look new again. "If you were to do one project, painting is usually really nice to freshen things up," he told CBS News. Perotti is also urging his clients to budget up to an additional 30% for extra, tariff-related costs on materials, particularly those that can go into remodeling bathrooms. Another tip is to work with materials suppliers to lock in prices when possible, even before materials become available. As far as repairs go, Perotti's advice is to prioritize fixing exterior damage, which can quickly lead to a home's degradation and cause more problems.
Forbes
20 hours ago
- Business
- Forbes
Building The Trades: We Can't Afford A $10 Billion Annual Housing Loss
Construction workers are in high demand as the country faces a severe affordable housing crisis. The United States and many other parts of the world are currently experiencing an affordable housing crisis. While there are many levers driving that crisis, one critical factor is a shortage of skilled trade workers. New research from the Home Builders Institute and the National Association of Home Builders (NAHB) revealed that the skilled labor shortage is causing an annual economic impact of $10.8 billion in the single-family home building sector. While home builders face higher material costs and more regulation that adds to time delays and extra costs, they also are scrambling to find skilled labor to start new home projects. The shortages mean fewer new homes are built, which means fewer homeowners are moving up, and fewer existing homes are becoming available to first time buyers as a more affordable option. Without having skilled labor, construction times are extended by an estimated two months. That extended construction time is responsible for the annual economic impact of $10.8 billion, which can be broken down into higher carrying costs and lost production. Extended construction times add up to $2.6 billion in direct costs, plus, it's estimated that in 2024, builders weren't able to build about 19,000 single family homes, representing a loss of $8.1 billion. Now, we need solutions. We need ways to fill that skilled labor gap that can help deliver the housing efficiently and effectively so that the costs are within reach of more Americans. Lowe's Chairman and CEO Marvin Ellison (left) and David Gitlin, Chairman and CEO at Carrier Global ... More Corporation discuss workforce development at Business Roundtable's event. The Business Roundtable, an association of CEOs of top U.S. companies, hosted a forum to discuss how large employers are creating new pathways for workers, including current best practices that expand opportunities in skilled trades and manufacturing roles. One of the main hurdles for these programs to be successful is the perception of these types of jobs. 'I grew up in a rural community in Tennessee and it wasn't uncommon that there was a vocational building next to a high school,' said Marvin Ellison, who serves as chairman and CEO at Lowe's. 'Many of my former classmates turned those into jobs, but then into careers and businesses. Sometime we started looking at that as less than.' Leadership at Lowe's saw that transition happening and decided to take responsibility for change by investing $50 million over five years to a training program to build skills and open the door to individuals wherever they choose to work. 'The construction trade has 500,000 open opportunities as we sit here,' Ellison said. 'There are 80,000 job openings for electricians per year, but they cannot find the skilled labor. AI is not going to fix a hole in your roof or stop a water heater from leaking. We'll always need skilled trades individuals so we started investing directly into vocational schools and organizations with a commitment in skilled trades.' The cultural shift goes well beyond no longer having vocational schools next to high schools. The school systems and their respective high school counselors that have the power to and the role of guiding students into careers and lifelong decisions have metrics based around college placements and therefore rarely point a student into the trades. 'There is a knowledge gap with guidance counselors,' said Calvin Butler, the president and CEO at utility company Exelon Corporation. 'They need to prompt students to consider careers outside of the traditional college path. Think beyond it and change lives.' This Business Roundtable session was moderated by Kevin O'Connor, skilled trades champion and the host of PBS's 'This Old House." Here he speaks with founder of Angi on the career opportunities in the trades. 'Demand in HVAC is doubling, but fewer folks are entering the field,' said David Gitlin, chairman and CEO at HVAC company Carrier Global Corporation. 'In just 10 years, we've gone from 1 of 3 going to a vocational school to 1 in 6. The amount of applicants is decreasing, and the availability of younger applicants is decreasing, and the demand is increasing.' He is leading Carrier to commit to making it a more attractive career by partnering with unions, and creating career advancements to give more upward mobility. The company is offering training, with a focus on the importance of how technology and virtual reality can assist the role, so participants get skills training, plus training in the digital realm. Sara Armbruster is the president and CEO at manufacturing company Steelcase and also said the ultimate need is to reframe views of careers in manufacturing that aren't always someone's first thought of what they want to do, help them see the possibilities which can be a life changing moment. New federal policies are changing the discussion for builders as well, with tariffs adding additional cost pressure and the deportation of immigrants reducing the available skilled worker pool for home builders. While the tariffs seem separate from the labor aspect, they are connected in several ways. A stable cost environment is needed to create a healthy supply chain, improve cost dynamics, and to maintain strong companies that can manage projects. 'Once the tax bill is passed, it will give people more opportunity to forecast costs,' said Peter Davoren, the chairman and CEO at Turner Construction Company. 'The U.S. has gone through modern day industrial revolution, and 90% of all materials for construction can come from the U.S. Eight years ago, one-third came from overseas, that's now at 10%. I think it will go up to 100% of all construction materials in the U.S. I believe we will be self-sufficient building with materials within the U.S.' He says that can happen by making the industry more welcoming. 'We need to provide all encompassing loyalty to employees and shareholders,' he said. 'There are so many workforce development programs providing the models for people to enter the industry, but not attracting them because of the perception of the industry." Finding workers in the short term might rely on immigration program reforms. Part of that could include a clear, efficient path for citizenship for people who seek work in the industry. Currently, immigrants account for 31% of all workers in construction trades, according to data from the U.S. Census Bureau. When I recently attended NAHB's spring leadership event, a lot of discussion was about how to approach this issue. There is passion around it, considering many builders are small business owners who are reliant on illegal immigrants to sustain their business. While they don't want to do something illegal, they also don't want their business to fail. Armbruster and the other CEOs at the Business Roundtable event hope for more certainty and stability from the government so they can guide their companies in better, more strategic decision making. Recently I was speaking with the editor at Rural Builder magazine who is writing about AI for his audience of 30,000 small builders in small U.S. markets. He spoke about a couple of his readers who have fairly manual processes and was frustrated by their reluctance to adopt technology that will help their business. Understandably, these are small business owners and any and all change is a risk, however, he recognizes that what these builders are doing with spreadsheets and hand drawings can be more accurate and much more efficient by using technology. The supply chain can certainly boost pro usage of technology. If the builder is buying lumber from a dealer that is using digital processes, the builder will need to also get up to speed. But, dealers are equally reluctant to adopt technology because of the large transformation and commitment it takes to do it. When companies do it though, there is a substantial pay off, said Blake Moret, the chairman and CEO at Rockwell Automation. His company has proven that technology offers the ability to be more efficient, and earn more profit. He also has been able to use that profit to expand into new lines of business. Dealers serving home builders could do the same, adding value in pivotal ways with efficiencies that will reduce costs and open the door to more affordable housing. As the nearly $11 billion in annual losses shows, we need solutions now. 'The need for speed cannot be underestimated or overstated,' said Julie Sweet, the chair and CEO at staffing company Accenture. She shared that the speed of transformation is possible. In November 2022, Accenture had only 30 people working on generative AI. Today, just two and a half years later, the company has more than 500,000 who have received AI fundamentals training, and more than 250,000 who have received advanced training, plus more than 70,000 are now deep data and AI specialists. She believes this is something that can be done, and it can be at speed, but it has to be done by thinking collectively. Small- and medium-sized enterprises have to buy in, which in the case of the Rural Builder audience can be a struggle, but it also is where the majority of economic activity happens. Keith Sonderling serves as the Deputy Secretary at the U.S. Department of Labor and is working on an executive order to set up one million apprenticeships every year. He emphasized the importance of technology in this process, in particular the adoption of AI. 'We have to train workers on how to use AI to make their lives better personally and at work and not worry about displacement,' he said. 'We have another executive order about AI literacy to understand how the next generation of workers can use AI. We need to start developing that AI curriculum to get it into classrooms as soon as possible. It really comes down to trust, adoption of AI is hard because there isn't trust.' The objectives are big and critical. The country needs 2.2 million new skilled construction workers over the next 3 years to start to meet what NAHB estimates at 1.5 million housing shortfall. Yet, optimism reigns. Manufacturers and service providers are investing in ways to lower costs for builders by using AI for its time saving advantages. And, we're all in this together. Even the folks in office jobs serving the home building industry have to take a role in building up the image of trade work, and it won't be easy. 'I truly believe the best is yet to come,' Davoren said. 'We have to get through the distractions. Go out and care for everyone you come into contact with and the strangers you don't come in contact with until you meet them for the first time. It's hard work. You might impact someone's life and they will model that behavior and impact someone else's life.'
Yahoo
2 days ago
- Business
- Yahoo
Builder Confidence Declines: Are Homebuilder ETFs in Trouble?
Homebuilder confidence has plummeted to an 18-month low, stirring concerns about the health of the housing market and raising red flags for investors in homebuilder-related ETFs. As such, iShares U.S. Home Construction ETF ITB, SPDR S&P Homebuilders ETF XHB, Invesco Building & Construction ETF PKB and Hoya Capital Housing ETF HOMZ are likely to feel the to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index, builder confidence fell in June to 32, its lowest level since December 2022. Gauges of traffic of prospective buyers and expected sales over the next six months are both at the weakest point in more than a year, per NAHB data. Current sales conditions dropped to the lowest level since mortgage rates, concerns over the broader U.S. economy and potential tariff-driven cost increases have discouraged both builders and buyers. In fact, the NAHB estimates that new tariffs, anticipated under President Trump's trade policies, could increase the cost of constructing a home by nearly $11,000 (read: Where's the Housing Market Heading? ETFs to Consider).Adding to the pressure is increased competition from the resale market, as the inventory of existing homes is increasing. Builders are turning to discounting and incentives, with 37% reporting price cuts in June — the highest since NAHB began tracking the figure monthly in the housing sector is facing other headwinds, such as an ongoing shortage of labor and buildable lots as well as elevated building material prices. iShares U.S. Home Construction ETF (ITB) iShares U.S. Home Construction ETF provides exposure to U.S. companies that manufacture residential homes by tracking the Dow Jones U.S. Select Home Construction Index. With AUM of $2.1 billion, iShares U.S. Home Construction ETF holds a basket of 47 stocks with a heavy concentration on the top two firms. The product charges 39 bps in annual fees and trades in a heavy volume of around 3 million shares a day on average (read: Sector ETFs Set to Gain as Inflation Cools in May).SPDR S&P Homebuilders ETF (XHB) SPDR S&P Homebuilders ETF provides exposure to homebuilders with a well-diversified exposure across building products, home furnishing, home improvement retail, home furnishing retail, and household appliances. It tracks the S&P Homebuilders Select Industry Index, holding 35 stocks in its basket. SPDR S&P Homebuilders ETF is the most popular option in the homebuilding space, with AUM of $1.2 billion and an average daily volume of 2.4 million shares. The product charges 35 bps in annual Building & Construction ETF (PKB) Invesco Building & Construction ETF follows the Dynamic Building & Construction Intellidex Index, holding 31 well-diversified stocks in its basket, with none accounting for more than 5.2% of the assets. Invesco Building & Construction ETF has amassed assets worth $216.7 million and sees a lower volume of roughly 13,000 shares per day on average. The expense ratio comes in at 0.57%.Hoya Capital Housing ETF (HOMZ)Hoya Capital Housing ETF invests in 100 domestic companies involved across the U.S. housing industry, including rental operators, homebuilders, home improvement companies and real estate services and technology firms, by tracking the Hoya Capital Housing 100 Index. Hoya Capital Housing ETF has accumulated $33.1 million in its asset base and charges 30 bps in annual fees. The product trades in an average daily volume of 2,000 shares. With sentiment nearing pandemic lows and affordability issues, homebuilder ETFs will remain under pressure. The above-mentioned ETFs have a Zacks ETF Rank #4 (Sell), indicating more pain ahead. However, investors shouldn't completely write off the homebuilder ETFs from their portfolio because they offer exposure to various firms, suggesting that the space can easily counter shocks from some of the industry's biggest components. Further, long-term housing demand may remain robust due to demographics and low supply. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SPDR S&P Homebuilders ETF (XHB): ETF Research Reports iShares U.S. Home Construction ETF (ITB): ETF Research Reports Invesco Building & Construction ETF (PKB): ETF Research Reports Hoya Capital Housing ETF (HOMZ): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
2 days ago
- Business
- Reuters
US single-family housing starts rise in May; permits slump
WASHINGTON, June 18 (Reuters) - U.S. single-family homebuilding increased in May, but a sharp drop in permits for future construction pointed to subdued housing market conditions amid headwinds from tariffs and excess inventory of unsold homes. Single-family housing starts, which account for the bulk of homebuilding, rose 0.4% to a seasonally adjusted annual rate of 924,000 units last month, the Commerce Department's Census Bureau said on Wednesday. President Donald Trump's import duties, including on lumber, aluminum and steel are raising construction costs for builders. The tariffs have heightened uncertainty over the economy, which the Federal Reserve has responded to by pausing its interest rate cutting cycle. The U.S. central bank is later on Wednesday expected to leave its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December. Higher borrowing costs have sidelined potential buyers, boosting the supply of new single-family homes on the market to levels last seen in late 2007. A National Association of Home Builders survey on Tuesday showed sentiment among single-family homebuilders plummeted to a 2-1/2-year low in June. The NAHB reported an increase in the share of builders cutting prices to lure buyers, and forecast a decline in single-family starts this year. Permits for future construction of single-family housing dropped 2.7% to a rate of 898,000 units in May. Residential investment, which includes homebuilding, contracted slightly in the first quarter after rebounding in 2024 following steep declines in the prior two years caused by a surge in mortgage rates. "We appear on course for a substantial decline in real activity in the current quarter and perhaps further weakness in the summer," said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets.
Time of India
2 days ago
- Business
- Time of India
Homebuilder sentiment in USA skids to two and half years low in June: NAHB
A gauge of U.S. homebuilder sentiment slid unexpectedly to its lowest level in two and a half years in June, with more than a third of residential construction firms cutting prices to lure buyers sidelined by high mortgage rates and economic uncertainty due to President Donald Trump's tariffs. The National Association of Home Builders/Wells Fargo Housing Market Index fell to 32, the lowest reading since December 2022, from 34 in May. Economists polled by Reuters had expected the sentiment score to improve to 36. Measures of current sales conditions, future sales expectations and buyer foot traffic all fell. On a regional basis, the Northeast posted a small rise while the South, Midwest and West all declined. "Rising inventory levels and prospective home buyers who are on hold waiting for affordability conditions to improve are resulting in weakening price growth in most markets and generating price declines for resales in a growing number of markets," Robert Dietz, NAHB 's chief economist, said in a statement. "Given current market conditions, NAHB is forecasting a decline in single-family starts for 2025." Mortgage rates remain elevated. The average rate on the most popular home loan, the 30-year fixed-rate mortgage, was 6.84% last week, according to home finance firm Freddie Mac, squarely in the middle of the 6.60% to 7.04% range over the past six months. "Buyers are increasingly moving to the sidelines due to elevated mortgage rates and tariff and economic uncertainty," said NAHB Chairman Buddy Hughes, a home builder and developer based in Lexington, North Carolina. "To help address affordability concerns and bring hesitant buyers off the fence, a growing number of builders are moving to cut prices." The survey showed 37% of builders were cutting prices in June, the highest percentage since NAHB began tracking the metric on a monthly basis in 2022. That figure was up from 34% in May and 29% in April, while the average price cut held steady at 5%. The use of any kind of incentive ticked up a point to 62%.
