NewsPublic Affairs / August 3, 2018

Home Construction Drops In Indiana As Supply Costs Increase

The increase in lumber costs is driving up the price of an average new single family home by more than $6,000 compared to last year. - Pixabay/public domain

The increase in lumber costs is driving up the price of an average new single family home by more than $6,000 compared to last year.

Pixabay/public domain
By Yue Sun

New home construction in Indiana dropped last month as home builders grapple with the increasing costs associated with tariffs.

According to a U.S. Census Bureau report, Indiana had nearly 1,500 single-family permits in June. That’s a 10 percent decrease from May and an eight percent drop from this time last year.

The 20 percent tariffs placed on imported Canadian softwood lumber contributed to increased building costs, in addition to the tariffs imposed on steel and aluminum imports.

According to an Indiana Builders Association press release, the increase in lumber costs is driving up the price of an average new single family home by more than $6,000 compared to last year.

Indiana Builders Association CEO Rick Wajda says a shortage of laborers and shipping difficulties are also adding to costs.

“As prices continue to escalate, you’ll start to see the demand weakens on the new home sign if we aren’t able to provide a safe and affordable product to Hoosier consumers,” he says.

Wajda says the single-family permits for Indiana still show an overall uptrend year over year.

He says policy makers need to see the real challenges tariffs are causing the industry moving forward.

“We’re certainly urging our Indiana delegation to take a look at the impact that the tariffs would have on not only Indiana products that are shipped elsewhere, but also to Hoosier consumers on a broader basis,” he says.

Wajda says they hope both parties can hammer out a long-term solution to address the high lumber prices.

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