The Drilldown: News Feed

Despite a slight dip in mortgage rates, high home prices and rising construction costs continue to challenge affordability.

Source(s): MarketWatch, April 10, 2025

🧠 Need to KNOW

The average 30-year fixed mortgage rate decreased to 6.62% as of April 10, 2025, down from 6.88% a year earlier. However, this modest decline has not translated into more affordable home buying, as elevated home prices and increased construction costs persist.​

🔍 Key Details

• Home Prices: The median home sale price has risen to $424,430, marking a 2.9% increase from the previous year.​

• Construction Costs: Tariffs introduced by the Trump administration are projected to raise home construction costs by 5-6%, potentially adding $17,000 to $22,000 to new homes.​

• Economic Uncertainty: Volatile trade policies and tariff implementations have left markets and consumers uneasy.​

• Job Security Concerns: According to Fannie Mae, 32% of employed individuals expressed concerns about job security, up from 23% the prior month.​

• Renting vs. Buying: Renting remains more affordable, requiring a $64,160 annual income versus the $116,600 needed to purchase a median-priced home.
  Read the full story​

🌍 Big Picture

While mortgage rates have dipped slightly, the combination of rising home prices, increased construction costs due to tariffs, and economic uncertainty continues to hinder housing affordability. These factors contribute to a challenging environment for prospective homebuyers despite lower borrowing costs. More context from MarketWatch

Affordability, resilience, and sustainability are driving innovation in residential construction.

Source(s): Mecklenburg Times, April 10, 2025

🧠 Need to KNOW

The homebuilding industry is undergoing significant transformations in response to affordability pressures, climate challenges, and evolving consumer preferences. Builders are adopting new strategies to meet these demands, focusing on smaller home designs, resilient construction methods, modular building techniques, and sustainable practices.​

🔍 Key Details

• Downsizing and Smaller Homes: The average size of new single-family homes decreased to 2,411 square feet in 2023, the smallest in 13 years, reflecting a trend toward more affordable housing options.​

• Resilient Construction: In 2024, the U.S. experienced 27 climate and weather-related disasters, each causing over $1 billion in damage. This has led to increased demand for homes built with durable materials and designs that can withstand extreme weather events.​

• Modular and Prefabricated Building: Modular construction methods are gaining popularity due to their efficiency, with the potential to reduce build times by 20–50% and material waste by up to 10%.​

• Sustainability in Homebuilding: Approximately 22% of homebuilders reported that 90% of their 2023 projects met strict green building criteria, indicating a growing emphasis on eco-friendly construction practices.​

• AI-Powered Smart Homes: The global smart home market is projected to surpass $170 billion in revenue in 2025, with household adoption reaching 77.6% this year and rising to 92.5% by 2029.
  Read the full story

🌍 Big Picture

These trends underscore a broader shift in the homebuilding industry toward more affordable, resilient, and sustainable housing solutions. As builders adapt to these changes, they are redefining residential construction to better meet the needs of modern homeowners.

Proposed increases in impact fees and rising tariffs on construction materials are set to elevate homebuilding costs in Phoenix.

Source(s): The Arizona Republic, April 8, 2025

🧠 Need to KNOW

Phoenix is considering significant hikes in development impact fees for builders, aimed at funding essential infrastructure like water systems, roads, and emergency services. These proposed increases, coupled with new tariffs on construction materials, could substantially raise the cost of building new homes in the area.​The Arizona Republic+2The Arizona Republic+2The Arizona Republic+2

🔍 Key Details

• Impact Fee Increases: In certain areas, such as northwest Phoenix, impact fees per single-family home could more than double, reaching up to $34,907. Northeast Phoenix might see fees rise by nearly 125% to $34,772 per house. Deer Valley's fees could climb almost 100% to $27,217.​

• Tariffs on Materials: New tariffs on construction materials are expected to add approximately $10,000 to the cost of building a new home.​

• Combined Cost Impact: The total increase in homebuilding costs, considering both higher impact fees and tariffs, could amount to $45,000 per new home.​

• Affordability Concerns: Experts warn that these increased costs will likely be passed on to homebuyers and renters, exacerbating affordability challenges in the Phoenix area. Metro Phoenix's median home price has risen nearly 60% since 2020, and rents have increased by more than 35% over the past five years.​

• Economic Implications: Michael Lieb, a veteran real estate broker and developer, noted that a $24,000 increase in impact fees could raise monthly mortgage payments by $175, potentially slowing the region's economic growth.
  Read the full story

🌍 Big Picture

The proposed fee hikes and tariffs are part of Phoenix's broader strategy to fund infrastructure amid rapid population growth. However, these measures may have unintended consequences on housing affordability and the local economy. As the city seeks to balance development needs with economic accessibility, stakeholders express concern over the potential for increased financial burdens on residents. More context from The Arizona Republic

Local suppliers and developers brace for increased costs and project uncertainties amid new tariff implementations.

Source(s): IPM Newsroom, April 8, 2025

🧠 Brain food

The construction industry in Champaign-Urbana is on alert as the Trump administration’s new tariffs—10% on all imports and higher rates for countries with trade imbalances—begin to take effect. Local developers and suppliers anticipate that rising material costs will make housing less affordable and potentially delay or downsize projects.

🔍 Deets

• LS Building Products, a major supplier in Champaign-Urbana, is preordering materials like siding and lumber in anticipation of cost increases.
• Developer Royse + Brinkmeyer warned that price spikes could delay housing projects already underway.
• Some suppliers say their inventories are stable for now but are preparing for volatility in cost and availability.
• Local leaders fear that added construction costs will push up housing prices or rents in an already tight market.

Read the full story

🌍 Big Picture

The National Association of Home Builders estimates that current tariffs could add $9,200 to the cost of building a new home. As trade tensions rise, the added costs risk worsening affordability challenges in cities like Champaign-Urbana, where the housing market is already strained.

More context from NAHB

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While the construction industry saw modest employment gains in March, newly announced tariffs may pose significant challenges ahead

Source(s): Engineering News-Record, April 4, 2025

🧠 Need to KNOW

The construction industry added 13,000 jobs in March 2025, according to the Bureau of Labor Statistics. However, industry economists express concern that the sweeping tariffs announced on April 2 could hinder future employment growth by increasing material costs and shaking business confidence. 

🔍 ACTION Items

• Monitor material costs: Tariffs will undoubtedly mean price hikes for essential construction materials.​

• Assess project budgets: Rising input costs could mean adjusting the budget in real time. ​

• Stay informed on policy changes: Keeping abreast of trade policies can help in strategic planning and risk mitigation.​

• Communicate with clients: Transparent discussions about potential cost increases can help manage client expectations.
  Read the full story​

🌍 Big Picture

While the immediate job growth in construction is positive, introducing substantial tariffs adds uncertainty to the mix. Economists warn that these tariffs could lead to increased building costs and project delays, potentially stalling employment growth in the sector.

The Trump administration plans to dismantle the Building Resilient Infrastructure and Communities (BRIC) program, canceling grants aimed at disaster preparedness

Source(s): Grist, April 3, 2025

🧠 Need to KNOW

The Federal Emergency Management Agency (FEMA) intends to kill the BRIC program, a significant initiative designed to fund community projects enhancing resilience against natural disasters—like the one unfolding in the central US. Established in 2018 and expanded in subsequent years, BRIC has allocated close to a billion dollars to various communities for infrastructure improvements. The current administration cites concerns over the program's focus on preventing problems instead of cleaning up after them.

🔍 ACTION Items

• Review funding strategies: Communities should seek alternative sources for resilience financing.​

• Assess project impacts: Evaluate which planned or ongoing projects may be affected by the grant cancellations.​

• Engage with policymakers: Advocate for the continuation or replacement of essential disaster preparedness funding.​

• Monitor policy developments: Stay informed on further changes to federal disaster management approaches.
  Read the full story​

🌍 Big Picture

The proposed dismantling of the BRIC program aligns with broader administrative efforts to reduce federal involvement in disaster preparedness, emphasizing immediate response over long-term resilience. This shift may pressure state and local governments to fund and manage disaster mitigation projects independently.

Proponents say 3D-printed concrete homes can be built quickly and cheaply

Source(s): Green Building Advisor, April 1, 2025

🧠 Need to KNOW

3D-printed housing is gaining attention as a potential tool to address the U.S. affordable housing crisis. Advocates say it offers speed, lower labor costs, and material savings. However, current technology is limited mostly to single-story homes, and energy performance, thermal mass, and finish quality still pose major design challenges.

🔍 ACTION Items

• Cost-savings potential: 3D printing may reduce labor costs and build time—but is not yet scalable for multifamily or multi-story builds.

• Material watch: Most current 3D-printed homes rely on cement-heavy concrete mixes, raising questions about energy efficiency and carbon impact.

• Tech integration: Builders experimenting with 3D printing will need new training, inspection protocols, and design adaptations.

• Know the limits: These homes don’t yet meet all conventional code standards in many jurisdictions.
  Read the full story

🌍 Big Picture

According to the National Low Income Housing Coalition, the U.S. faces a shortage of more than 7 million affordable rental homes, and traditional construction methods aren’t closing the gap fast enough. While 3D printing offers compelling innovation, current limitations make it more of a niche tool than a broad solution. Scaling the technology would require policy support, material innovation, and skilled labor development.

Trade policy shifts and ongoing labor shortages are putting upward pressure on home construction and remodeling costs across the U.S.

Source(s): Latin Times, April 4, 2025

🧠 Need to KNOW

Homebuilding costs are climbing again, driven by inflation, labor shortages, and increased reliance on imported materials. According to a recent NAHB analysis, imported goods now account for 30% of all residential construction inputs, up from 17% just a decade ago—a shift that leaves the sector vulnerable to supply shocks and tariffs.

🔍 ACTION Items

• Materials under pressure: Tariffs and global supply instability are increasing prices for critical inputs.

• Labor crunch continues: Skilled trades remain in short supply, raising wages and elongating project timelines.

• Anticipate volatility: Remodelers should monitor pricing for imported fixtures, electrical components, and metal goods.

• Communicate with clients: Factor potential delays or price shifts into contracts and timelines.

• Strategic sourcing: Consider identifying domestic or alternative suppliers to reduce import risk.
  Read the full story

🌍 Big Picture

This data reinforces what remodelers are already experiencing on the ground: a fragile supply chain and tight labor market are increasing costs and uncertainty. Rising reliance on foreign-sourced materials—especially amid renewed trade barriers—makes price planning harder and emphasizes the value of local sourcing and clear client communication.

Led by gains in single-family and multifamily segments, residential construction activity posted its third consecutive month of growth.

Source(s): Forest Economic Advisors (FEA), April 2, 2025

🧠 Need to KNOW

According to U.S. Census Bureau data reviewed by FEA, total U.S. residential construction spending increased to a seasonally adjusted annual rate (SAAR) of $885.08 billion in February 2025, marking a 0.7% increase from January and the third straight month of gains. Single-family and multifamily segments showed positive growth, while remodeling declined slightly.

🔍 ACTION Items

• Spending climbs: Total residential spending rose 0.7% month-over-month, driven by new construction.

• Remodeling softens: Spending on home improvements declined for the fifth straight month.

• Monitor builder momentum: Continued growth in new builds may indicate rising contractor confidence heading into spring.

• Keep watch on remodeling dip: Assess whether this is seasonal or a longer-term consumer pullback.
  Read the full story

🌍 Big Picture

February's uptick in residential construction spending reflects a modest recovery in the housing sector. However, builders continue to face challenges from elevated material costs due to tariffs and ongoing labor shortages. These factors contribute to affordability concerns and may temper the pace of future construction activity.
National Association of Home Builders

Local contractors warn new tariffs on foreign materials could drive up project costs and worsen affordability challenges.

Source(s): KSN News, April 2, 2025

🧠 Need to KNOW

Wichita homebuilders are bracing for higher costs as President Trump’s newly announced reciprocal tariffs take effect. Although some materials from Canada and Mexico are exempt, many essential products—including metals and electrical components—are likely to rise in price, compounding supply chain and affordability pressures for residential construction.

🔍 ACTION Items

• Local concern mounting: Builders in Wichita warn that higher input costs will squeeze project budgets and timelines.

• Tariff impact varies: While lumber and drywall from Canada/Mexico are exempt, other key materials like aluminum, steel, and wiring face new costs.

• Remodeler prep: Consider revisiting estimates for Q2–Q3 projects to account for potential cost escalation.

• Policy watch: Monitor federal and NAHB updates as tariff negotiations evolve.
  Read the full story

🌍 Big Picture

The return of aggressive trade policies could ripple through the remodeling and building sectors, especially in price-sensitive markets like the Midwest. For remodelers, this highlights the ongoing need to build flexibility into bids and sourcing strategies—and to communicate early with clients about material price risks.

Tariffs Set to Increase Costs in Residential Construction, Affecting Both Imported and Domestic Materials

New tariffs on Canadian imports, including oil and wood products, are expected to raise prices for key construction materials such as asphalt shingles and lumber, impacting overall project costs.

Source(s): Providence Journal, April 3, 2025

🧠 Need to KNOW

Recent tariffs on Canadian imports are poised to elevate costs in the residential construction sector. Materials like asphalt shingles, which rely on Canadian oil, and lumber are particularly affected, leading to anticipated price increases across various building components.​

🔍 Takeaways & Action Items

• Asphalt Shingles Impacted: Manufacturers dependent on Canadian oil may raise prices to offset tariff-induced cost increases.​

• Lumber Costs Rising: Tariffs on Canadian wood are expected to increase expenses for structural components in residential construction.​

• Supply Chain Adjustments: Builders should explore alternative sourcing strategies and consider domestic materials to mitigate cost hikes.​​

➡️ Read the full story

🌍 Big Picture

Imposing tariffs on essential construction materials underscores how interconnected global supply chains are and their direct effect on domestic industries. As material costs rise, the affordability and feasibility of residential construction projects may be challenged, emphasizing the need for strategic planning and adaptability within the industry.​

➡️ More context from The Wall Street Journal

U.S. Tariffs Announced, But Canadian Lumber Exempt

Canadian and Mexican building materials are spared from sweeping U.S. tariffs, offering short-term cost stability for remodelers—but broader pricing pressure remains on the horizon. 

Source(s): NAHB, April 2, 2025

🧠 Need to KNOW

President Trump announced sweeping new tariffs—10% on all trading partners, with rates as high as 50% for some. So far, Canadian softwood lumber and Mexican materials like gypsum and concrete are exempt.

🔍 Takeaways & Action Items

• Exemptions Secured: Canadian lumber and Mexican drywall are not subject to the new tariffs.

• Still in Play: Tariffs apply to steel, aluminum, copper, and many appliances.

• Plan Ahead: Remodelers should brace for price volatility and review supplier agreements.

• NAHB's Role: The association continues to push for broader tariff reductions to aid housing affordability.

➡️ Read the full story

🌍 Big Picture

These exemptions offer short-term relief, but broader tariffs still pose risks to construction pricing. Material cost increases could ripple through remodeler budgets, further straining housing affordability and project timelines in an already stressed market.

➡️ More context from NAHB

Coastal Bend Construction Faces Labor Shortages Amid Statewide Immigration Raids

While no surprise ICE raids have been reported locally, even documented immigrants are concerned.

Source: KIII-TV, February 13, 2025

🧠 Need to KNOW

Following recent immigration policy changes and subsequent ICE raids in major Texas cities, the Coastal Bend construction industry is experiencing labor shortages. Although no local raids have been reported, apprehension among both documented and undocumented workers is contributing to workforce instability. 

🔍 Takeaways & Action Items

• Increased Worker Apprehension: Even legally documented workers are concerned about potential immigration enforcement actions.

• Rising Labor Costs: The scarcity of skilled labor drives wages as contractors compete for a limited workforce.

• Training Opportunities: Workforce Solutions of the Coastal Bend offers free programs to train individuals interested in construction jobs, aiming to alleviate the labor shortage. 

• Economic Implications: A reduced labor supply amid high demand is expected to increase construction costs, impacting project budgets and timelines.

➡️ Read the full story

🌍 Big Picture

The heightened focus on deportation amplifies the existing labor crisis in the construction industry, causing higher costs and longer delays. Proactive engagement with local workforce development programs and policy advocacy may help contractors navigate these challenges.

➡️ More context from KIII-TV